China's Country Garden proposes deal to reduce offshore debt by $11.6 bln (updated)

Sunac China Holdings

10/01/2025 24:54

(Repeats story from Thursday with no changes to text)
    By Clare Jim
       HONG KONG, Jan 9 (Reuters) - Country Garden  2007.HK 
has proposed a deal to its offshore creditors that will cut its
debt by $11.6 billion, paving the way for the property developer
to seek more time from the high court in Hong Kong to implement
a restructuring plan.
    The indebted developer has reached an understanding with a
lender group made up of seven banks ahead of the company's
liquidation hearing on Jan. 20 in Hong Kong, bringing it closer
towards a restructuring of its offshore debt.
    Once China's biggest property developer, Country Garden
defaulted on $11 billion in offshore bonds in late 2023,
deepening a debt crisis in the sector that had already
experienced defaults by many developers, including China
Evergrande Group  3333.HK .
    Country Garden had $16.4 billion of offshore debt at the end
of 2023, including $10.3 billion in bonds and three syndicated
loans with an outstanding principal amount of $3.6 billion. Both
are covered by the restructuring.
    The proposal, announced on Thursday, outlines options for
creditors, including a conversion of debt into cash with a 90%
haircut or receiving new debt instruments with delayed maturity.
    Some options include extending the maturity by as much as
11-1/2 years alongside choosing mandatory convertible bonds and
new debt instruments.
    "The company is particularly pleased with the interest shown
by certain banks in supporting the company over the long term to
navigate current challenges," Country Garden said.
    It also said its controlling shareholder, Chairperson Yang
Huiyan, is considering converting her shareholder loan, with
$1.1 billion outstanding principal, into equity in the group.
    The negotiations over the definitive terms of the proposal
are still ongoing, the company said.
    Country Garden's December contracted sales dropped 50% from
the previous year to 6.91 billion yuan ($942.43 million),
according to a regulatory filing.
    The company showed a revised-down cash flow projection to
some creditors when it submitted the preliminary terms of its
restructuring proposal to them, Reuters reported in November.
    A prolonged property market slump has been weighing on
developers' ability to repay debt.
    Smaller rival Sunac China  1918.HK  has informed some of its
offshore creditors it is unlikely to meet a September maturity
deadline for its restructured bonds, sources said, as weak sales
raise the prospect of a new round of offshore debt restructuring
in the property sector.
    Country Garden will hold a board meeting next Tuesday to
approve its overdue 2023 audited annual results and 2024
unaudited interim results.
    Shares of the company have been suspended since April 2,
2024, pending the release of the financial results.


($1 = 7.3321 Chinese yuan renminbi)

 (Reporting by Sameer Manekar and Clare Jim; Editing by Jamie
Freed, Varun H K and Jane Merriman)
 ((clare.jim@thomsonreuters.com;))