China developer Fantasia proposes new restructuring terms, shares up (updated)

Fantasia Holdings

30/04/2024 04:15

(Updates story first published April 29 with more details,
share price rise)
    By Clare Jim
       HONG KONG, April 29 (Reuters) - Embattled Chinese
property developer Fantasia  1777.HK  said on Monday it has
entered into a new agreement with its ad hoc group of
bondholders to restructure its $4 billion dollar bonds with new
notes and equities.
    The latest restructuring terms offered by the Shenzhen-based
developer, which defaulted its offshore bonds in late 2021, were
seen revised down from its first proposal published in early
2023, according to the term sheets published on Monday evening.
    Cheering the restructuring agreement, shares of Fantasia
jumped more than 11% on Tuesday morning, outperforming the 0.4%
fall in the Hang Seng Mainland Properties Index  .HSMPI .
    Many Chinese property developers have defaulted since the
sector slipped into a debt crisis in mid-2021 and a growing list
of companies have reached restructuring agreement with their
creditors. 
    Developers and creditors have said they expected the revamp
terms to be tightened due to a worsening outlook for the
county's real estate sector. 
    Fantasia said in a filing on Monday it plans to swap $1.3
billion of the debt into 45.2% of enlarged shares in the
company, and issue eight tranches of new notes maturing between
2026 to 2031, with cash interest ranging from 4.5% to 6.5%. 
    Controlling shareholder Baby Zeng will inject $6 million as
a shareholder loan into the company, with an interest of 5-8%
per annum, and the "new money" will fund the fees and expenses
of the proposed restructuring. 
    The terms compare to the first proposal in which the new
notes had a maturity between 2024 an 2029 and interests ranging
from 5% to 8%, and Zeng and Guangdong government backed investor
Gortune Alternative Fund Management were going to inject $15
million and $100 million, respectively.     
    Fantasia said it has gained support from the ad hoc group
which held 32% of the outstanding notes, and creditors will
receive a 0.1% consent fee if they support the proposal by May
21.     
    On Monday, Shanghai-based developer CIFI Holdings  0884.HK 
also said it has reached restructuring agreement with its ad hoc
group, while Shenzhen peer Kaisa Group  1638.HK  said it aimed
to iron out restructuring terms in the coming four weeks.

 (Additional reporting by Roushni Nair in Bengaluru; Editing by
Shounak Dasgupta and Michael Perry)
 ((Roushni.Nair@thomsonreuters.com))