China developer CIFI gets bondholder go-ahead on restructuring plan (updated)

CIFI Holdings (Group)

29/04/2024 04:13

(Adds details and background in paragraphs 4-7, shares in
paragraph 8)
    By Xie Yu
       HONG KONG, April 29 (Reuters) - Embattled Chinese
property developer CIFI Holdings  0884.HK  said on Monday it has
reached agreement with a key group of bondholders on a plan to
restructure its offshore debt.
    A key group of bondholders has agreed "in principle" on the
key terms of a proposal offered by CIFI, the company said in a
filing to the Hong Kong stock exchange. The group holds or
controls approximately 43% in aggregate of the principal amount
of CIFI's offshore notes and bonds.
    Shanghai-based CIFI defaulted on payments tied to a
convertible bond in October, 2022, and has been working with its
creditors for repayment solutions since. 
    CIFI's proposal comes at a time when many Chinese developers
are still struggling with rising debt as property sales in China
remain sluggish. A growing number of them have defaulted on
their repayment obligations since the debt crisis began in
mid-2021, and a handful have been ordered by the courts to be
liquidated so far.
    Under the debt restructuring proposal, creditors will have
the option to receive cash, with at least an 85% haircut, or a
mixture of new notes, new loans, and the company's shares, with
smaller or no haircuts, while CIFI intends to cut its offshore
debt by around $3.3 billion to $4 billion.
    CIFI said it was still in negotiations with its creditors,
including the key bondholder group and a separate group of
lenders. The company has not yet entered into any legally
binding agreement.
    It said 68 of the company's projects had been shortlisted
under the "whitelist" scheme initiated by the Chinese government
to inject liquidity into the crisis-hit sector to help
developers finish the construction of property projects.
    Shares of Chinese property developer CIFI Holdings jumped as
much as 25% to HK$0.375, their highest since March 4, after the
filing.

 (Reporting by Xie Yu; Editing by Kim Coghill and Jacqueline
Wong)
 ((Yu.Xie@thomsonreuters.com;))