Property developer Sunac China (01918.HK) has gained overwhelming creditor support for its offshore debt restructuring plan, marking a major milestone in the company’s multi-year effort to resolve its financial crisis. The approval paves the way for court confirmation and could significantly ease the company’s overall debt burden amid the prolonged downturn in China’s property market.
On the evening of October 14, Sunac China announced that the voting results from a meeting held that morning showed that among 1,492 participating creditors, 1,469 voted in favor of the company’s offshore debt restructuring plan, with a support rate as high as 98.5%. Calculated by the amount of debt, these voting creditors held a total of about $8.43 billion in debt, of which the amount corresponding to the votes in favor represented a support ratio of about 94.5%.
According to Hong Kong’s Companies Ordinance, for a Hong Kong-listed company’s offshore debt restructuring plan to be approved and take effect, it must obtain consent from creditors holding more than 75% of the total amount of restructured bonds. Sunac’s offshore restructuring plan has been overwhelmingly approved by creditors and can now proceed to the court approval stage.
The company said that the High Court of Hong Kong will hold a hearing on November 5 to make a final ruling on the restructuring plan. Once approved, Sunac’s offshore debts are expected to be “largely cleared.”
Sunac China is a privately owned real estate developer established in Tianjin in 2003. From 2017 to 2020, the company consistently ranked fourth in the real estate sales rankings published by market research firm CRIC. In 2021, after China Evergrande Group —long ranked among the top three—ran into financial trouble, Sunac China rose to third place on the list.
Beginning in the second half of 2021, the entire real estate industry entered a downturn, and Sunac China also faced a liquidity crisis. The company sought to rescue itself through measures such as asset disposals, equity placements, and interest-free loans from its controlling shareholder, but ultimately it could not avoid defaulting on the public market in the first half of 2022.
To address its debt crisis, Sunac has been pushing forward with two major debt restructuring plans, one for onshore and one for offshore obligations. On January 22, 2025, Sunac announced the successful completion of its second round of onshore debt restructuring, which is expected to reduce more than 50% of its domestic debt, with the remaining portion extended for up to 9.5 years. The restructuring ensures that Sunac will face no repayment pressure for the next five years.
As for offshore debt, Sunac China announced in November 2023 that it had completed its offshore debt restructuring, involving a total of $10.237 billion in offshore debt and cutting $4.525 billion in liabilities.
However, due to the sluggish recovery of China’s property market, Sunac continued to face heavy debt pressure. On January 10, 2025, China Cinda HK Asset Management, which holds $30 million in Sunac’s offshore bonds, filed a winding-up petition against the company with the Hong Kong High Court. On April 17, Sunac urgently launched a second round of offshore debt restructuring, proposing to convert about $9.55 billion of offshore debt entirely into company shares, thereby achieving a “complete clearance” of offshore liabilities.
Specifically, Sunac proposed to distribute two types of new mandatory convertible bonds to offshore creditors. The first type would have a conversion price of HK$6.80 per share and could be converted starting from the effective date of the restructuring; the second type would have a conversion price of HK$3.85 per share and could be converted between the 18th and 30th month after the restructuring takes effect, though the total amount of this second type would not exceed 25% of the total debt. The conversion prices of these two types of bonds represent premiums of 330% and 147%, respectively, over Sunac China’s closing price of HK$1.58 per share on April 17.
Half a year later, this plan has finally been approved by creditors with an overwhelming majority. A person close to Sunac China said earlier that if this offshore restructuring proceeds smoothly—combined with the successful completion of the domestic restructuring in early 2025—Sunac China’s overall debt-servicing pressure would be reduced by nearly 70 billion yuan, saving the company several billion yuan in annual interest payments.
Since the beginning of 2025, debt restructurings among Chinese property developers have clearly accelerated. According to a report released by CRIC, as of August 4, 2025, a total of 42 real estate companies had disclosed debt restructuring plans, of which 16 had completed all or part of their restructurings. In terms of timing, 8 companies’ restructuring plans were approved within 2025.
The same report also noted that “debt-to-equity swaps” have gradually become a standard feature in real estate companies’ debt restructuring efforts. The restructuring plans of companies such as Country Garden (02007.HK), Logan Group (03380.HK), CIFI Holdings (00884.HK), Sino-Ocean Group (03377.HK), China Aoyuan (03883.HK), and Fantasia Holdings (01777.HK) all include debt-to-equity conversion elements.
“Although there is an inherent conflict between creditors and real estate developers, the property sector has already been in adjustment for four years since China Evergrande’s default in 2021, and the market has yet to show clear signs of recovery. As a result, most creditors have become more pragmatic and rational in their expectations,” the report stated.
“For creditors, whether or not to support a debt restructuring is a straightforward economic calculation: as long as the recovery rate under restructuring exceeds that of liquidation, the only rational choice is to accept the restructuring plan. From an industry-wide perspective, only when most defaulted real estate developers successfully complete their debt restructurings can the sector’s risks truly be cleared out.”