(Reuters) -China’s Country Garden Holdings said on Friday that it would issue bonds worth about $13 billion as part of an offshore debt restructuring plan aimed at easing one of the biggest defaults in the country’s property sector.
The restructuring, which also includes issuance of warrants and new shares, could cut more than $11 billion in debt if fully implemented, the company said.
The developer plans to issue zero-coupon mandatory convertible bonds, consisting of $7.5 billion for scheme consideration payments and $5.4 billion for additional creditor settlements, according to a company filing.
A smaller tranche of $39.5 million will resolve a bilateral loan, the company said.
The bond conversion price is set well above the current share price, and the instruments will convert into equity over time, significantly diluting existing shareholders but offering creditors a path to recovery.
Concrete Win, controlled by Country Garden’s chairlady Yang Huiyan, has committed to subscribing to new shares at HK$0.60 each to settle $1.14 billion in shareholder loans once the restructuring is effective.
Country Garden will issue shares at HK$0.60 apiece under a specific mandate to be approved by independent shareholders at an upcoming extraordinary general meeting.
Class‑1 lenders, consisting of banks, will receive a two‑year $89 million loan under the scheme and up to 1.16 billion warrants priced at HK$0.60 each, which can be used to offset the loan.
The roadmap lands as China’s property sector slump, now in its fourth year, continues to squeeze funding.
China Evergrande is in liquidation proceedings, while peers have wrestled with protracted restructurings. Country Garden itself has been working towards offshore relief since 2023 and now needs shareholder and regulatory approvals to implement the scheme.
The extraordinary general meeting on December 3 will vote on the bonds and share issuance, and the scheme is expected to be complete by the year-end.
(Reporting by Roushni Nair in Bengaluru; Editing by Subhranshu Sahu)
