Troubled Chinese developer Powerlong Real Estate Holdings late Thursday announced preliminary terms of a restructuring agreement with creditor Ad Hoc Group (AHG). The agreement is expected to provide the Shanghai-based company with a temporary reprieve from its ongoing debt crisis.
In a Hong Kong filing, the construction company said it had reached an agreement with AHG to restructure its offshore bonds, giving bondholders the opportunity to transfer their holdings to shares in its subsidiary Powerlong Commercial Management Holdings and its convertible bonds. He said he was given the option of exchanging it. Kong Stock Exchange.
“The company would like to update shareholders and potential investors on significant developments in its plans for a comprehensive resolution of certain of the company’s offshore debt,” the company said.
The term sheet indicates that the total value of the options will not exceed US$715.7 million. Other options include replacing existing assets with newly issued medium-term notes, long-term notes and new financing, with maximum entitlements under the various options ranging from US$238.5 million to US$500 million. It was in the range of US$88 million.
Members of the special group hold approximately 27% and 35.6% of the total outstanding principal amount of plan debt and existing notes, respectively, according to the statement.
The company and AHG have “agreed to certain material terms of the proposed comprehensive solution and are committed to working together in good faith and using commercially reasonable efforts,” according to the statement. The detailed terms of the Reconstruction Support Agreement (RSA) will be further agreed on before 2019. February 23, 2024.
The effective date of the restructuring is September 30, 2024, it added, as soon as reasonably practicable and no later than 10 business days after the conditions of the RSA are satisfied or waived.
“Execution of the term sheet by us and AHG marks an important milestone in the parties’ achievement of a comprehensive solution,” the company said.
The move comes after the company warned in late November that it would be unable to repay its offshore debt due to a lack of liquidity, potentially leading to cross-defaults on other loans. The measures were taken in response to the fact that this had inflamed market sentiment. An even more serious crisis.
The bid price for Powerlong’s 5.95% dollar bond due April 2025 fell 1 cent from late November to 7.35 cents on the dollar, according to data compiled by BondSupermarket.
Powerlong’s share price rose 4.4% to HK$0.72 on Friday. Still, it’s down 52% since the beginning of this year.
The country’s real estate sector remains in trouble despite mitigation measures launched by authorities to boost the market and ease liquidity pressures on developers.
The market is indifferent to these measures. New home prices in China fell for the fifth straight month in November, according to the latest official data, with 59 out of 70 cities tracked by the National Bureau of Statistics seeing month-on-month declines.
