(Yicai) Sept. 22 -- Chinese property developer Country Garden Holdings is seeking to restructure nine publicly traded bonds worth CNY13.9 billion (USD2 billion), proposing to extend repayments over a decade through 2035, according to a media report.

The bonds, due between 2023 and next year, would be repaid in nine semi-annual installments from Sept. 2, 2031, to Sept. 2, 2035, media outlet The Paper reported recently, citing the Foshan-based company's restructuring plan.

Country Garden's financial issues were exposed in 2023 when it defaulted on offshore debt amid a widespread property sector downturn.

The builder’s shares [HKG: 2007] ended 1.6 percent lower at 61 Hong Kong cents (8 US cents) in Hong Kong today following the announcement. The stock has gained 7 percent since it started trading again on Jan. 21 following a nine-month suspension.

The proposed repayment schedule would begin with four smaller installments -- 1 percent, 2 percent, 3 percent, and 4 percent of principal -- and then increase to 15 percent, 15 percent, 20 percent, and 30 percent, reaching full repayment in 2035. Interest would be fixed at a simple annual rate of 1 percent and paid in full on Sept. 2, 2035.

Creditors that accept the terms must also agree to revisions in credit enhancement measures, including the release of certain guarantees.

The developer is also offering options to bondholders, including a cash buyback, a stock-for-debt swap, and a general creditor arrangement. Under the buyback plan, up to CNY450 million (USD63.3 million) of bonds would be repurchased at 12 percent of face value on a pro-rata basis.

For the equity swap, Country Garden would issue a specified number of ordinary shares to a special purpose trust in Hong Kong, priced at HKD2.60 (33 US cents) each. The trust would gradually sell the shares within 24 months, using the proceeds to repay creditors in yuan equivalent to their bond holdings. Creditors would receive cash and would not directly hold the new shares.

Another option would allow creditors to convert their bond holdings into general non-bond claims, with repayment deferred to 2033 and interest set at 1 percent per year.

To encourage approval of the restructuring plan, Country Garden is offering a consent fee. Creditors who vote in favor of all resolutions at a bondholders meeting will receive an early repayment equivalent to 0.1 percent of their holding, which will then be canceled.

Editor: Emmi Laine