Indebted Chinese real estate developer Country Garden proposed a deal on Thursday to restructure overseas debt worth $10.3 billion.
Reuters said the restructuring would provide its creditors with a variety of options, including converting debt into cash and extending maturities.
The latest news on the restructuring comes ahead of the company's liquidation hearing on January 20, paving the way for the developer to seek more time from Hong Kong's High Court to implement the restructuring plan.
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The proposal gives creditors the option of auctioning the debt for cash or receiving mandatory convertible bonds (MCBs) with a maturity date around the end of 2028.
It also includes three other options to extend the maturity up to 11.5 years, along with the selection of new debt instruments, including MCBs and loan facilities.
Country Garden, once the largest real estate developer in China US$11 billion in offshore bonds defaulted at the end of 2023its debt was estimated at about $194 billion at the time.
The group's partial collapse deepens a debt crisis in the sector, which has already experienced a number of developer defaults, including China Evergrande Group.
Country Garden's contracted sales fell 50% in December from a year earlier to 6.91 billion yuan ($942.43 million), according to a regulatory filing.
The company presented lowered cash flow forecasts to some creditors as it filed preliminary terms. restructuring plan Reuters reported last November.
The prolonged downturn in the real estate market has been affecting developers' ability to repay debt.
Meanwhile, smaller peers Sunac China The company has informed some of its offshore creditors that restructured bonds are unlikely to mature in September, sources said, as weak sales raised the prospect of a new round of offshore debt restructuring in the real estate sector.
Country Garden Chairman Yang Huiyan said at a monthly management meeting on Monday that the company has completed 380,000 residential units by 2024, according to Country Garden’s WeChat account.
Yang added that Country Garden will have significantly fewer homes to complete this year but will continue to focus on delivering homes to buyers and restoring its balance sheet.
The developer will hold a board meeting next Tuesday to approve overdue audited annual results for 2023 and unaudited interim results for 2024.
The company's shares have been suspended from trading since April 2, 2024, pending the release of financial results.
- Reuters Additional editing by Jim Pollard
See also:
China Country Garden has “offered a debt restructuring plan to creditors”
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China asks banks to roll over $13 trillion in local debt at lower interest rates
Major Chinese cities to lift all restrictions on home buyers
China Country Garden liquidation hearing suspended for 6 months
Country Garden obtains approval for deferred payment of domestic bonds
China Country Garden “hires Kroll to conduct liquidation evaluation”
PwC under investigation for “facilitating Evergrande's misconduct over many years”
Country Garden warns China's real estate market faces 'severe' tests
Evergrande founder banned for securities fraud, unit fined
