Sunac China unveils debt restructuring plan for mainland creditors

Chinese property developer Sunac China announced on Thursday that it had proposed a debt restructuring plan for its mainland China creditors. The plan offers four options to address its financial obligations and manage cash flow effectively.

• Cash Tender Offer: Sunac proposes to buy back bonds at a discounted price, estimated at 18 per cent of their original value. This option has a maximum limit of 4.4 billion yuan ($607.44 million).
• Debt-to-Equity Swap: Bondholders can convert their notes into newly issued shares on the Hong Kong Stock Exchange. Bonds worth 100 yuan will be convertible into approximately 13.5 shares. The company aims to accept around 3 billion yuan of bonds under this option.
• Land Parcel Sale Repayment: Creditors can choose to receive repayment from the proceeds of a planned land sale by Sunac.
• Debt Extension with Lower Interest: Existing bonds can be swapped for new ones with a lower coupon rate of 1 per cent.

Sunac hopes this plan will provide flexibility and options for its mainland creditors. It’s a strategic approach to stabilise their financial position and manage their cash flow effectively.

Attribution: Reuters