Recently, several well-known distressed real estate companies have been reporting positive developments, injecting recovery confidence into the persistently sluggish property market. SUNAC's nearly $10 billion USD debt-to-equity conversion restructuring plan, announced six months ago, has now reached its most critical juncture.

On October 14, SUNAC announced that the results of its offshore debt restructuring plan meeting held that day showed 1,492 creditors participated in voting, with 1,469 creditors voting in favor, representing a 98.5% approval rate and corresponding to a debt amount support rate of 94.5%.

According to requirements, real estate companies' offshore debt restructuring must reach at least a 75% threshold. In fact, when SUNAC initially announced this comprehensive nearly $10 billion USD debt-to-equity conversion plan, the approval rate from major creditors had already exceeded this standard.

The reason it has continued for six months is that SUNAC hoped to gain support from more creditors, reduce debt burden, and achieve the expected goal of converting nearly $10 billion in USD debt to equity.

From the plan itself, this is a comprehensive debt-to-equity conversion plan. It ensures that major shareholder Sun Hongbin continues to lead SUNAC, maintaining a stable equity structure while continuing to complete housing delivery guarantees, debt resolution, and ongoing operations.

Now that SUNAC has won this crucial battle, it only awaits approval from the Hong Kong High Court for implementation in mid-next month, which is essentially a statutory procedure with minimal issues expected.

Earlier this year, SUNAC obtained approval for a 15.4 billion yuan domestic debt restructuring plan, steadily advancing through four options: cash payment, stock economic benefit rights payment, asset-for-debt settlement, and debt extension, to be completed by year-end.

After completing these two major operations, SUNAC's overall debt repayment pressure is expected to decrease by nearly 70 billion yuan, with annual interest expenses potentially saving billions of yuan. This means SUNAC will significantly reduce debt repayment pressure, improve credit ratings, boost sales, and reverse current performance losses.

To date, eight real estate companies including Country Garden, Sino-Ocean, Shimao, and Kaisa have successfully completed offshore debt restructuring, with three more companies - CIFI, Logan, and SUNAC - recently approaching completion.

From successfully completed offshore debt cases, many distressed real estate companies' previous plans involved debt replacement and refinancing. Currently, constrained by weak sales and credit obstacles, they have not yet emerged from difficulties.

For SUNAC, this represents a second debt resolution, but this operation is more aggressive than previous ones, though it's a necessary approach. The comprehensive debt-to-equity conversion will thoroughly resolve its offshore debt issues.

However, to truly "stand up" and return to normal operations, these distressed real estate companies still need time. As CIFI's management stated, it may still require three years.

In SUNAC's 2025 interim report, Sun Hongbin stated: "Under the environment of continuous supportive policy rollouts, core cities and core locations will gradually stabilize, but the overall recovery of the real estate market may still require a process and considerable time."

After all, most of these well-known distressed real estate companies still involve substantial domestic public bonds, which have only been extended rather than fully converted to equity or debt elimination. Additionally, numerous pending litigations require time to resolve.

For them, the core issue remains sales recovery.

According to SUNAC's disclosure, September sales reached 1.29 billion yuan, a decrease of 120 million yuan year-over-year. Contract sales averaged 16,330 yuan per square meter, but increased by 5,400 yuan per square meter year-over-year. For the first nine months of this year, cumulative sales totaled 31.76 billion yuan, a decrease of 4.69 billion yuan year-over-year. Contract sales averaged 31,730 yuan per square meter, but increased by 11,390 yuan per square meter year-over-year.

From operational perspective, since last year, SUNAC's premium Yihao Yuan products in core locations of Shanghai and Beijing have been popular, potentially becoming the biggest asset that gives the market and creditors confidence. Shanghai Yihao Yuan achieved four launches with four sellouts, capturing the national single-project sales championship with 22 billion yuan in sales.

At the end of September, SUNAC announced that the first financing cooperation funds from China Great Wall Asset Management had arrived, meaning the mega high-end renovation project at the core scarce location where the Yangtze River and Jialing River converge in Chongqing has officially started development, with new products expected to launch by year-end or early next year.

Certainly, SUNAC still holds numerous core quality projects in key first and second-tier cities. With debt resolution and external funding support by year-end and early next year, the large-scale launch of key projects will provide relatively obvious support for sales recovery and growth.