Sunac China Holdings Ltd. opened as much as 20% higher in Hong Kong after clearing a major hurdle in the restructuring of $9 billion worth of debt.
(Bloomberg) — Sunac China Holdings Ltd. opened as much as 20% higher in Hong Kong after clearing a major hurdle in the restructuring of $9 billion worth of debt.
The company’s shares reached HK$1.89 as of 10:28 a.m. on Friday, up about 6% while narrowing its 59% plunge since resuming trading in mid-April. Its offshore bonds were little changed Friday morning at around 21 cents on the dollar.
Investors holding more than 75% of its offshore debt have accepted a restructuring proposal, Sunac said late Thursday. The developer expects to implement its debt restructuring through so-called schemes of arrangement, which requires approval of at least 75% of creditors in value.
Sunac received enough investor support despite advisers urging creditors to rethink. Earlier this week, a group of offshore creditors outside the ad-hoc committee called on other creditors to refrain from signing the restructuring support agreement in an attempt to “get a better deal.”
Chinese developers including Sunac fell into distress during an unprecedented property slump, prompting regulators to formulate a sweeping rescue plan for the industry. The firm warned investors that it expects a second consecutive year of net losses of as much as 28 billion yuan ($4.1 billion), partly due to delays in project delivery.
–With assistance from John Cheng and Alice Huang.
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