By Jiahui Huang
Sunac China's shares rose after it reached a deal to restructure around $2 billion in onshore debt, becoming the first Chinese property developer to do so as the country's real-estate crisis drags on.
Shares in the company rose as much as 8.4% in Hong Kong early Wednesday. They remain down by 30% so far this year.
The gains came as the property developer said late Tuesday that plans to restructure some onshore bonds issued by its unit, Sunac Real Estate, were approved. The arrangement covers 15.4 billion yuan of outstanding onshore debt, equivalent to $2.11 billion.
Sunac China still faces a winding-up petition issued by China Cinda Asset Management in a Hong Kong court earlier this month over about $30 million in unpaid debts and interest. The hearing is scheduled for March 19.
Sunac China said at the time that it will oppose the petition vigorously.
It said in a statement it doesn't expect the petition to have a meaningful impact on its operations, but may prompt other creditors to demand accelerated repayment or to pursue enforcement action. The developer added that it was communicating with China Cinda to try and find a resolution, and didn't rule out seeking "a more comprehensive holistic offshore debt solution."
China remains in the midst of a protracted slump in the property sector, historically a major driver of economic growth. The sector has shown tentative signs of recovery thanks to policy support rolled out by Beijing since September last year, but some developers still hold massive amounts of debt. Property investment remains lackluster and housing demand and prices weak.
Property giant China Evergrande was ordered to liquidate earlier this year in the face of mounting operational and debt stresses, a process started by overseas creditors. A number of other companies in the sector are awaiting the outcomes of liquidation petitions against them.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
January 21, 2025 23:15 ET (04:15 GMT)
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