In This Article:
Developer Sunac China Holdings secured approval for the restructuring of its onshore debt, a move that participants in the property market hailed as good news for China's beleaguered real estate sector.
The agreement also makes Sunac the first defaulted mainland Chinese developer to reduce its onshore debt.
In a filing with Hong Kong's stock exchange on Tuesday, the Tianjin-based developer said repayment of the principal and interest on the 10 bonds "will be adjusted" and "restructuring plan options including bond repurchases", cash tender offers, payment via equity and debt settlement with assets would be considered.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
The company said it would make arrangements for the bondholders to select their own repayment options.
Sunac's deal bodes well for China's property sector, participants in the market said.
"Onshore creditors are not normally willing to compromise," said Raymond Cheng, a managing director at CGS International Securities in Hong Kong. "If restructuring ... can also be applied to developers' onshore debts, it will further help reduce developers' liquidity pressure."
The deal could "provide a viable reference model for other embattled Chinese property developers", said Kenny Ng, a strategist at Everbright Securities International.
"It also helps stabilise the market and has a positive impact on share prices."
Sunac's Hong Kong-listed shares fell 2.4 per cent to HK$1.62 on Wednesday morning, though they were up more than 2 per cent earlier in the session.
Cheng said a sustained sales recovery would be the next crucial step for Sunac to ensure the repayment of its debt.
Additional supportive measures for the property sector are expected to be rolled out at the meetings of China's two main political bodies in March, Ng said.
"Since the second half of 2024, China has implemented incremental policies to support the sustainability of the recovery," Ng said. "We saw property sales volume was above expectations, although it softened at the beginning of 2025 as the first quarter is typically a slow season for the property market."
Earlier this month, Sunac faced a liquidation petition filed by China Cinda (HK) Asset Management over an unpaid US$30 million loan.
Ranked 18th among Chinese developers by sales, Sunac has told some of its creditors it may not be able to meet repayment deadlines for a dollar bond maturing in September, which was part of the first tranche of the restructured notes.