China developer CIFI proposes new restructuring terms to halve offshore debt

CIFI Holdings (Group)

03/01/2024 06:12

HONG KONG, Jan 3 (Reuters) - Shanghai-based property
developer CIFI Holdings  0884.HK  said on Wednesday it has
proposed five options with different maturity extensions and
haircuts to its bondholders in an effort to restructure its $7
billion offshore debt.
    The debt revamp proposal, which also includes swapping part
of the debt for equity, aims to halve the firm's debt to $3.3
billion to $4 billion, it said in a filing.
    The refined terms follow the developer's proposal in March
which had no plan for haircut and maturity extension of less
than 7 years, highlighting the worsening operational and
financing environment since the sector slipped into a debt
crisis in mid-2021.
    Reuters reported in October that a few developers, including
CIFI, had reduced offers to offshore creditors with haircuts of
up to 70% to 80% because of the deteriorating environment. CIFI
kicked off a debt offshore restructuring process in November
2022 after suspending all its payments. 
    A refined proposal was delivered "after considering the
...discussions with (the bondholders), the prevailing market
conditions and the group's latest business performance", CIFI
said in the Wednesday filing.
    It added that while the property market may face more
difficulties, the firm is targeting to deliver 80,000 homes to
buyers with the cost of construction and installation expected
to be more than 30 billion yuan ($4.20 billion).
    CIFI, the 19th largest developer in China by sales, said
options to bondholders with equitization or haircut elements
will have a shorter maturity, and most of the maturity
extensions will range from two to nine years, with a new coupon
rate of 2-4%.     
    All options will be credit enhanced by a package including
onshore and offshore assets.   
    Haitong International and Linklater are CIFI's advisers.
Alvarez & Marsal and Allen & Overy are advisers to the
co-ordination committee, and Houlihan Lokey and Kirkland & Ellis
are advisers to the bondholders ad-hoc group.
    Shares of CIFI jumped 5.9% on Wednesday afternoon session,
outperforming a 1.8% decline in the Hang Seng Mainland
Properties Index  .HSMPI . 
($1 = 7.1455 Chinese yuan renminbi)

 (Reporting by Clare Jim; Editing by Shri Navaratnam)
 ((clare.jim@thomsonreuters.com;))