On January 4, after voting three times and postponed, 36 Krypton learned that Sunac China’s overall domestic bond extension plan totaling 16 billion yuan had been voted and approved by the bondholders’ meeting on January 3.
The overall extension of domestic bonds involves a total of 10 existing corporate bonds and supply chain ABS, with a weighted average extension period of 3.51 years. Sunac uses multiple assets such as Guangzhou Cultural Tourism City, Chongqing Jiangbeizui A-ONE, and Wenzhou Emerald Coastal City as the payment guarantee for the extension period, and has designed a cash payment + small payment mechanism.
Sunac has not yet announced the specific plan for domestic debt restructuring. The extension plan previously disclosed by market information is that the principal of the extended bonds will be paid in six installments. The principal will be paid every three months from September 9, 2024. The principal payment ratios are 5%, 10%, 20%, 20%, 20%, and 25%. The last payment of the principal will be in 2025 December 9th.
Previously, the principal payment of unextended bonds was divided into nine installments. Starting from December 9, 2024, the principal payment will be made every three months. The principal payment ratios are 2.5%, 2.5%, 5%, 5%, 5%, 20% %, 20%, 20%, 20%, and the final principal payment time is December 9, 2026.
It is understood that after the extension plan is passed, it will effectively alleviate the liquidity pressure of Sunac in the next 3 to 4 years and further improve the overall financial situation.
In terms of Sunac’s overseas debts, according to the previous annual report, the existing debt holders with a principal amount of approximately US$9.1 billion have established an overseas creditors team to conduct in-depth research on Sunac’s financial and operating conditions. The two parties are formulating a restructuring framework, Some progress has been made in narrowing the differences on various economic terms.
The current offshore debt restructuring framework is: convert 3 billion to 4 billion US dollars of existing debts and certain shareholder loans into common stocks or equity-linked instruments; convert the remaining existing debts into new US dollar-denominated public notes, with a maturity of 2 to 8 years from the effective date of the reorganization; providing net proceeds from partial asset disposals as an additional source of funding for repayment of new notes.
According to incomplete statistics, since 2020, 40 real estate companies have substantially defaulted on their debts. Following R&F Properties and Logan Group, Sunac is the third real estate company in the industry to achieve an overall rollover of domestic debt. According to the statistics of wind information, from January 1 to October 28, 2022, the amount of credit bonds extended by real estate companies is 132.350 billion yuan, and the number of extended bonds is only 78.
People in the industry generally believe that the extension of real estate bonds temporarily relieves the urgent need. If the fundamentals and cash flow of real estate companies have not been substantially improved, the extension may mean that risks will be exposed later.
Recently, Sunac has been disposing of assets frequently. In addition to selling the equity of Shenzhen Ice and Snow Cultural Tourism City, the Dongjiadu project has also received capital injection.
On January 4, according to Sunac’s official Weibo, the group will reach a financing cooperation with China Huarong, a syndicate of six banks led by Shanghai Pudong Development Bank, and CITIC Trust on the Shanghai Dongjiadu project by the end of 2022. The partners will work together on the project Injection. The total scale of this cooperation exceeds 12 billion yuan, and the first tranche of funds has been completed recently.
36 krypton author Wang Lu
media reports
Sina Surging News 36Kr
Event Tracking
- 2023-01-04 Sunac’s 16 billion yuan domestic debt was extended by Guangzhou Cultural Tourism City, Chongqing Jiangbeizui and other assets for credit enhancement
- 2023-01-03 Sunac transferred 3.68 billion yuan to transfer the equity of Shenzhen Ice and Snow Cultural Tourism City, and Huafa took over again
- 2022-12-09 Sun Hongbin apologized for Sunac’s substantial impairment of M&A assets for losses
- 2022-12-06 Sunac released the latest domestic debt restructuring plan, and the current debt that has not been extended will be extended for 4 years
- 2022-12-02 Why AMC, Trust and Six Banks Enter Sunac Dongjiadu Project
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