(Yicai) Sept. 19 -- Shares of Sunac China Holdings rose after the Chinese property developer's creditors approved its offshore debt restructuring scheme, which is set to downscale its liabilities by up to USD4.5 billion.
Sunac [HKG: 1918] was trading up 4.6 percent at HKD2.93 (37 US cents) as of today's lunch break after gaining as much as 13.9 percent in morning trading.
Some 99.8 percent of Sunac's creditors voted for the schemes, with the offshore debts' approval rate at 98.3 percent, the Tianjin-based company said in a filing to the Hong Kong Stock Exchange yesterday. The approval rate of voting creditors and liabilities aggregate was the highest in the industry in recent years.
Sunac will be able to cut its liabilities aggregate by up to USD4.5 billion, while the mandatory convertible bonds cap was raised to USD2.8 billion from USD2.2 billion, the firm said in another filing yesterday.
Sunac will now proceed to seek the court's approval and sanction in response to the scheme, with the hearing scheduled on Oct. 5, it added.
Sunac has USD10 billion of offshore debts. According to the company's debt restructuring plan published on March 28, creditors can choose between a number of options, including swapping old notes with new ones, issuing convertible bonds, and converting part of the debt to shares of Sunac's property management arm Sunac Services.
As the Chinese real estate market is entering a repair period thanks to the relaxed policy environment, successful debt restructurings can enable property firms to temporarily escape from debt repayment pressure to focus on normal business operations and help improve market expectations, win policy support, and increase developers' survival rates, according to China Real Estate Information.
Editors: Zhang Yushuo, Futura Costaglione