On December 10, Caijing Company reported (Reporter: Li Jie) that there has been new progress on the second restructuring plan of SUNAC's domestic bonds.

It was reported that on December 10, two bonds under SUNAC, H6 Rondi 01 and H0 SUNAC 03, have successfully passed the restructuring vote; the other 8 bonds still have two weeks for voting and will face the final voting result for all 10 bonds on December 23.

The scale of the company bonds involved in this restructuring by SUNAC is approximately 15.4 billion yuan, including 10 bonds such as H SUNAC 05, H SUNAC 07, PR SUNAC 01, and 20 SUNAC 02.

The total outstanding amount of the two bonds that passed the restructuring vote is 1.686 billion yuan, with H6 Rondi 01 having a balance of 0.423 billion yuan and H0 SUNAC 03 having a balance of 1.263 billion yuan.

"The smooth passage of the restructuring vote for these two bonds indicates that some investors still Hold confidence in SUNAC, but ultimately it will depend on the voting results of the remaining 8 bonds," an analyst in the Real Estate industry stated. If this restructuring of SUNAC's domestic bonds is successful, SUNAC will not face payment pressure within the next 5 years and can focus on restoring its Operation.

Due to sales performance and Operation recovery falling short of expectations, SUNAC announced a second restructuring plan for its domestic bonds on November 27, which includes cash tender offers, Stocks, payment of economic benefits rights of Stocks, debt-for-assets arrangements, and full-term extensions.

"SUNAC's current domestic bond restructuring plan provides creditors with four flexible options, including cash compensation, Stocks, and Other debt repayment resources. Moreover, the plan does not include any mandatory options, and there is no upper limit set on the debt extension portion, allowing creditors to choose freely according to their needs," a Fixed Income analyst noted. This market-oriented scheme to reduce debt will help the company 'survive', return its Operation to normal, and protect creditors' interests.

In fact, in this tug-of-war over debt extension, real estate companies exchanged time for space to address their cash flow emergency, without fundamentally reducing their debt. When the market recovery takes longer than expected, they are bound to face pressure from the upcoming debt maturities again. Among the first batch of real estate companies that completed the domestic debt extension, some have already added two extensions within six months this year until March next year.

In addition to debt extension and debt restructuring, a small number of real estate companies have chosen to go down the path of bankruptcy reorganization and reverse mixed ownership reform.

In the publicly disclosed debt restructuring plan, SUNAC is the first in the industry to propose a market-oriented solution for resolving domestic debt, which aligns better with the current trend and demand for comprehensive debt reduction among real estate companies. If the plan is implemented, it could reduce its domestic company debt by more than 50%, effectively alleviating cash flow pressure and carrying certain industry reference significance, said the Fixed Income Analyst.

The Analyst believes that the large-scale debt reduction and long extension procedure in SUNAC's plan is expected to achieve a debt conversion scale of over 10 billion yuan, providing support for SUNAC to overcome its difficulties and accelerate its return to normal operations, as well as assisting in the resolution of subsequent debt risks and better addressing issues of project delivery and revitalization.

SUNAC firmly adheres to the principle of not evading debts, which is why there is no upper limit set for the amount of debt extension options. An informed source stated that compared to other bankruptcy reorganization plans that generally impose mandatory debt reductions, this plan is relatively more favorable to creditors.

It is understood that to further enhance the sincerity of the restructuring plan, SUNAC has used most of the cash raised through its previous share placement for discounted repurchases of debt, while also adding cash payment arrangements to repay each holding account with 1% of the principal and corresponding capitalized interest, along with all unpaid interest, by the end of next year.

However, an unnamed creditor stated that SUNAC must quickly restore healthy operations to truly protect the long-term interests of all creditors and investors.

In terms of sales performance, as of the end of November 2024, SUNAC China has cumulatively achieved a contract sales amount of approximately 45.39 billion yuan, with a cumulative contract sales area of around 2.123 million square meters, and an average contract sales price of about 21,380 yuan per square meter.