![](http://img2.chinadaily.com.cn/images/202311/22/655d5ebba3109068cb0056fe.jpeg)
The Sunac logo seen in Wuhan, central China’s Hubei province, on November 1, 2021. [Photo/VCG]
Embattled Chinese real estate developer Sunac China Holdings has met the conditions for debt restructuring through effective planning, becoming the first major Chinese developer to complete such a process, the company said. Stated.
Analysts said the restructuring would buy Sunac time to improve its financial situation and serve as a good reference for other Chinese real estate developers in terms of debt management and risk resolution.
Sunac will have approximately $10 billion in debt converted into six new bonds, mandatory convertible notes, convertible notes, and equity in its subsidiary Sunac Services Holdings, for consideration of $5.7 billion, $2.75 billion, and $1 billion, respectively. , said it would be worth $775 million. statement Monday night.
The converted new notes, compulsory convertible notes and convertible notes were listed on the Singapore Exchange on Tuesday, and the shares of Sunac Services were transferred to the relevant creditors, the company said.
In January, the company completed the restructuring of approximately 15.4 billion yuan ($2.15 billion) of domestic debt, with an overall extension period of three to five years.
Sunac’s restructuring will reduce approximately 45% of its total foreign open market debt, which totals $4.5 billion, and will give the company a two to three year cushion on foreign debt.
This restructuring also led to an improvement in Sunac’s stock market performance. The company’s shares closed 12% higher at HK$2.61 (33 cents) on Tuesday.
In order to better adapt to the current relatively weak Chinese real estate market, many listed real estate developers are actively pursuing debt restructuring.
Among them, Sunac will be the first to complete the entire process of domestic and foreign debt restructuring, and the total restructuring scale will be approximately 90 billion yuan. The whole process took him 18 months.
Analysts said it could serve as a good reference for other developers.
“However, the completion of the debt restructuring will only temporarily relieve Sunac’s severe debt service pressures, and the associated risks have not yet been fully eliminated. Sunac will need to take advantage of the debt resolution grace period. We should not let our guard down,” An Xinhua said. , Director of Beijing Royalty & Talent Law Office.
Liu Shui, director of corporate research at China Index Academy, said Sunac could get back on track by resuming normal operations as soon as possible in the future.
“Sunac needs to further ensure smooth construction and timely delivery of projects and revitalize existing works. It also needs to facilitate payment collection by accelerating sales and improve its organizational structure. “We need to do that,” Liu said.