Sunac working on second offshore debt restructure

China Sunac (1918) has become the first Chinese property developer to plan a second restructuring of its offshore debt.

The company has informed an offshore creditor, a unit of state-owned asset manager Cinda (1359), of its intention, its lawyer told a Hong Kong court yesterday.

Cinda (HK) filed a liquidation petition this year against Sunac over the non-payment of a US$30 million (HK$234 million) loan.

The petition surprised many in the market because Sunac completed a US$9 billion offshore debt restructuring in 2023, the first developer in China's property sector to do so since the debt crisis that began in 2021.

A lawyer for Cinda, Thomas Wong of Temple Chambers, sought an immediate liquidation of Sunac in yesterday's hearing, saying the developer had not provided any documents of a new restructuring plan.

The hearing was adjourned to April 28 to allow Sunac to present its progress.

Cinda, which is also a major lender to Sunac in mainland China, is using the Hong Kong petition to raise its bargaining power for negotiations on both its onshore and offshore loans, according to two people familiar with the situation.

Meanwhile, Sunac's peer Powerlong Real Estate (1238) warned of a loss of up to 5.6 billion yuan (HK$6.01 billion) last year amid "the severe operating environment" in the sector. The loss is expected to range from 5.3 billion yuan to 5.6 billion yuan, from a loss of 2.58 billion yuan in 2023, the company said in a filing yesterday.

Reuters and staff reporter