SUNAC is now just "one step away" from complete approval of its restructuring plan.
On October 14, SUNAC announced that during the offshore debt restructuring plan meeting held that day, a total of 1,492 creditors voted, with 1,469 creditors voting in favor of the restructuring plan. The approval rate reached 98.5% by headcount, corresponding to 94.5% support by debt amount.
With this result, SUNAC's offshore debt restructuring plan has gained approval from the majority of scheme creditors, exceeding the 75% threshold by amount. Subsequently, the Hong Kong High Court will hold a hearing on November 5 to make a final ruling on the restructuring plan. This means SUNAC is now just "one step away" from complete approval of its restructuring plan.
On April 17 this year, SUNAC officially launched a "full debt-to-equity conversion" plan for its offshore debt totaling approximately $9.55 billion, covering public market bonds, private loans and other types of debt. The company also designed an "equity structure stabilization plan" to address the dilution of management shareholding.
Specifically, SUNAC plans to distribute two series of new mandatory convertible bonds (new MCBs) to creditors as consideration for canceling existing debt and releasing claims related to existing debt.
One type will receive new MCBs with a conversion price of HK$6.80 per share, convertible from the restructuring effective date. The other type will receive new MCBs with a conversion price of HK$3.85 per share, convertible within 18-30 months after restructuring.
To maintain equity structure stability and ensure that major shareholders (i.e., Sun Hongbin) can continue contributing value to the group's delivery assurance, debt risk mitigation, and long-term business recovery, the plan proposes to provide major shareholders with certain conditional restricted shares to maintain their shareholding percentage at a certain level.
Specifically, for every $100 principal amount of new mandatory convertible bonds allocated to creditors, approximately $23 worth of bonds will be issued to major shareholders or their designees. Major shareholders will only receive extremely limited rights such as voting rights for these restricted shares within six years, and normally cannot dispose of, pledge, or transfer the restricted shares.
If this offshore debt restructuring succeeds, combined with previous domestic debt restructuring, SUNAC's overall debt pressure is expected to decrease by nearly 70 billion yuan, with annual interest expenses potentially saving billions of yuan, significantly reducing pressure at the listed company level.
According to CRIC statistics, including SUNAC, there are currently three real estate companies that have achieved or are close to successful overall domestic and offshore debt restructuring, including Xu Hui Group and Logan Group. Additionally, eight companies including Shimao Group and Kaisa Group have successfully completed offshore debt restructuring, bringing the total to 11 real estate companies that have achieved partial domestic or offshore debt restructuring.
However, successful debt restructuring does not mean companies have returned to normal operating track. Industry players like Xu Hui Holdings have indicated that it may take another three years for the company to truly "stand up again." Looking at SUNAC, as of mid-2025, the company still has 254.82 billion yuan in interest-bearing debt and faces litigation amounts of approximately 166.38 billion yuan.
CRIC notes that the primary task for distressed real estate companies remains actively negotiating with financial institutions and creditors to appropriately extend debt terms and alleviate current debt pressure. For non-distressed real estate companies, structural adjustments to land reserves are needed, accelerating the disposal of stagnant inventory and speeding up project disposal in lower-tier cities.