By South China Morning Post | Created at 2025-01-09 14:31:18 | Updated at 2025-01-09 23:40:09
9 hours ago
Indebted Chinese developer Country Garden Holdings has proposed restructuring terms that aim to reduce its offshore debt by up to US$11.6 billion while providing creditors with multiple options including converting debt into cash or accepting extended maturity periods.
The developer said it had reached an understanding on key terms of the restructuring proposal with a committee comprising seven banks that are long-term business partners, according to a filing with the Hong Kong stock exchange on Thursday night.
The proposal offers five options: converting debt to cash, receiving mandatory convertible bonds maturing in 3.5 years, and extending maturity by 7.5, 9.5 or 11.5 years alongside choosing new debt instruments, including mandatory convertible bonds, notes and loan facilities.
In addition, the controlling shareholder of the company is considering converting its existing shareholder loan, which has an aggregate outstanding principal amount of US$1.1 billion, into shares of the company or its subsidiaries, the company said.
The restructuring proposal would enable the group to achieve “significant deleveraging, with a targeted reduction of indebtedness up to US$11.6 billion”, Country Garden said. “As a result, the group will have a more sustainable capital structure, allowing it to focus on delivering housing units, continuing its business operations, preserving asset value, and implementing a business and asset disposal strategy which it believes has the best potential to maximise value for all stakeholders.”
As of December 31, Country Garden had total offshore attributable interest-bearing liabilities of US$16.4 billion.
