Sunac China scheme now effective with court sanction order

By Marisa Wong

Los Angeles, Oct. 5 – Sunac China Holdings Ltd. issued an update on Thursday related to its offshore debt restructuring, this time regarding court sanction of the scheme and the effectiveness of the scheme.

The company’s board of directors announced that the scheme has been sanctioned by a court order at the petition hearing on Oct. 5.

The effectiveness of the scheme is conditioned on all of the following conditions being met:

• Approval of the scheme by a simple majority in number of the scheme creditors present and voting at the scheme meeting either in person or by proxy representing at least 75% in value of the aggregate voting scheme claims of the scheme creditors present and voting at the scheme meeting either in person or by proxy;

• Sanction of the scheme by the court;

• Filing of a sealed copy of the sanction order with the Registrar of Companies; and

• Relevant parties duly executing the deed of undertaking.

The board said that, as of the announcement on Thursday, all the scheme conditions have been fulfilled and the scheme effective date was Oct. 5.

The company said it will make further announcements to inform shareholders and other investors of any material developments relating to the restructuring, including the restructuring effective date, as and when appropriate.

Prior developments

As previously disclosed, Sunac China proposed to implement its restructuring through a scheme. The restructuring involves, among other things, the discharge and release of scheme creditors’ claims in connection with existing debt in exchange for the restructuring consideration.

The restructuring consideration comprises new notes and convertible bonds, as well as, if the scheme creditors so voluntarily elect, mandatory convertible bonds and existing Sunac Services shares.

The deadline for scheme creditors to make their election of the mandatory convertible bonds and existing Sunac Services shares was 11 a.m. ET on Sept. 20.

Prior to that deadline, the company filed Chapter 15 bankruptcy on Sept. 19 in the U.S. Bankruptcy Court for the Southern District of New York to gain recognition of its proceedings in Hong Kong, as previously reported.

Before that, a meeting was held at 11 p.m. ET on Sept. 17 in Hong Kong for creditors to consider an arrangement.

A total of 2,019 scheme creditors holding voting scheme claims in an aggregate principal amount together with accrued interest of $9,922,717,051, representing 97.3% of the total value of outstanding voting scheme claims, attended and voted, in person or by proxy, at the scheme meeting.

Of those scheme creditors, a total of 2,014 scheme creditors holding voting scheme claims in the aggregate principal amount together with accrued interest of $9,753,677,916, representing 98.3% of the total value of outstanding voting scheme claims voting at the meeting, voted in favor of the scheme.

As a result, the scheme was approved by the required majority of scheme creditors.

With those results, the company was able to proceed to seek the approval and sanction of the court in respect of the scheme.

The company is hoping for the restructuring to take effect by Dec. 31, as previously noted.

Sunac is a Tianjin, China-based residential and commercial property developer. The Chapter 15 case number is 23-11505.

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