Sunac China proposed a preliminary reorganization plan for overseas debt and hopes to resume healthy development next year.This large real estate developer in China has suffered US dollar debt defaults earlier this year.
The Wall Street Journal reports that Sunac China, headquartered in Tianjin last Friday (December 9), announced that most of the implementation of about 11 billion US dollars (below, about 14.9 billion yuan)For reorganization plans, it is recommended to convert 3 billion to 4 billion US dollars of debt into shares or links to equity, and replace the other parts of the existing debt on the new US dollar notes from 2 to 8 years.
Sunac China said in a regulatory announcement that it is still discussing the plan with the creditors, which requires the latter to approval, and say that the plan will help the company reduce leverage.
The Chinese government is currently trying to prevent the rapid deterioration of the real estate industry in trouble.In the past year and a half, due to the decline in sales and financing of new houses, Evergrande, Sunac China and more than 20 other developers have fallen into crisis, which has led to serious confidence in Chinese home buyers, and the entire industry has declined.
In the past few weeks, regulators have taken decisive actions to allow state -owned banks to provide credit and launch other support policies to ensure that developers have obtained sufficient debt and equity financing in China.Since the transformation of the supervisory wind direction, the price of Hong Kong listed stocks and USD bonds of many Chinese developers has risen sharply.
It is reported that the ultimate goal of the regulatory agency is to revive the overall housing market and housing sales, which will also help developers who have debt defaults.
Other Chinese real estate companies are also trying to come up with the reorganization plan.Evergrande is expected to give a series of liquidity issues on how to solve its overseas debt problems this month; one year ago, the real estate giant's US dollar bond defaults caused the entire real estate industry.Evergrande is the largest issuer of junk bonds in Asia. According to the face value, the company's international debt is about $ 20 billion.Both Evergrande and Sunac China hired Hualian, a US restructuring professional, as a financial adviser.
Chen Xiao, a senior analyst of the data and research center of Zhuge Finding the Chinese Real Estate Trading Platform, said that Sunac China's restructuring plan may inject confidence in the entire real estate industry.Chen Xiao also said that the new progress of Sunac China's reorganization provided a sample for other dilemma developers. If Sunac China's debt reorganization plan was approved, the company's liquidity pressure will be greatly alleviated and helps to helpSubsequent business development.
Sunac China's US dollar bond prices have risen since mid -November. At that time, Chinese financial regulatory agencies released 16 measures to support the real estate industry.According to FACTSET's data, Sunac China's recently priced at 17%of USD bonds in April 2024. In contrast, before 16 support policies were introduced, the bond price was about 6%of the face value.
Sunac China also released the audited 2021 performance report last Friday. Previously, the annual report was postponed due to the resignation of PricewaterhouseCoopers of Pwi, Pwi, which was previously audited.The company's net losses in 2021 were about $ 5.5 billion, and their revenue during the reporting period was about $ 28.5 billion, a 14%decrease from the previous year.
The company said that as of the end of 2021, the liabilities were about $ 151 billion, of which about $ 46 billion was lended, and contract liabilities were about $ 49 billion.Contract liabilities usually involve houses that developers have pre -sale but have not been delivered.
Sunac China has also been negotiating with the lenders, bond investors and other creditors in mainland China to reorganize on shore debt.Sunac China said in an annual report of 2021 that so far, some lenders have agreed to exhibit the borrowing period.
Sun Hongbin, chairman of Sunac China, said in a announcement that it has stepped up the sale of assets and other assets, and has basically suspended land from the second half of 2021.The company also said that sales have fallen sharply since March this year.The latest monthly contract sales data shows that the company's contract sales decreased by about 70%compared with the same period of the previous year.
In the 2021 annual report, Sun Hongbin expressed "the most sincere apology" to shareholders and creditors.At the end of last year, Sun Hongbin paid for his own pocket and provided the company with an interest -free loan of $ 450 million.
He also predicts that the Chinese economy will be better in 2023, and "the real estate market will also quickly resume stability."He also said that Sunac China's goal is to complete the project construction and delivery, and the group gradually resumes stability in operation.
He said: "The Group will deeply reflect on the shortcomings and problems in the past development, learn lessons, and resolutely adjust."
