(Reuters) -Sunac China on Tuesday emerged as the first embattled Chinese property developer to successfully cut down on its onshore debt, after it said holders of all ten bonds had accepted its restructuring proposal.
The landmark deal enables Sunac, once one of China’s largest real estate developers, to deleverage its 15.4 billion yuan ($2.11 billion) outstanding onshore debt by more than half.
Reuters reported last week that Sunac had won support from nine of the ten bondholders.
Sunac’s restructuring is poised to open the floodgates for a flurry of similar deals this year, with a recovery nowhere in sight for China’s struggling property sector.
Logan Group and CIFI Holdings could be the other property developers to revamp their onshore debt in 2025. A source had told Reuters last month that much of CIFI’s decision would depend on Sunac’s success in securing a deal.
Hit with a liquidity crisis since 2021, Chinese developers began tackling the restructuring of offshore bonds in 2022. But for politically sensitive onshore bonds, they have repeatedly extended maturities, hoping for a pickup in cashflow.
Beijing-based Sunac was also the first to complete a comprehensive overhaul of its $9 billion offshore debt in November 2023.
The onshore restructuring comes after the company was hit with a liquidation suit earlier this month, stoking worries over its ability to repay the restructured offshore debt.
Sunac has warned that the winding up petition could prompt other creditors to demand immediate repayment of their loans.
($1 = 7.2820 Chinese yuan renminbi)
(Reporting by Aaditya Govind Rao in Bengaluru; Editing by Shounak Dasgupta and Devika Syamnath)
