By Mary-Katherine Stinson
Lexington, Ky., Nov. 20 – Sunac China Holdings Ltd. issued debt instruments totaling $9,454,635,435 comprised of new notes, mandatory convertible bonds, convertible bonds and existing Sunac Services shares on the restructuring effective date of Nov. 20, according to multiple sources.
Six tranches of new notes totaling $5,704,637,631 were issued in the following amounts:
• $500 million of 5% notes due Sept. 30, 2025 in tranche A;
• $500 million of 5¼% notes due Sept. 30, 2026 in tranche B;
• $1 billion of 5½% notes due Sept. 30, 2027 in tranche C;
• $1.5 billion of 5¾% notes due Sept. 30, 2028 in tranche D;
• $1.5 billion of 6% notes due Sept. 30, 2029 in tranche E; and
• $704,637,631 of 6¼% notes due Sept. 30, 2030 in tranche F.
Additionally, the company issued the following convertible bonds:
• $2,749,997,804 of 0% mandatory convertible bonds due Sept. 30, 2028; and
• $1 billion of convertible bonds due Sept. 30, 2032.
For the mandatory convertible bonds, the first conversion period will end on Dec. 1. The initial conversion price is HK$6 per share.
For the convertibles, the first conversion period began and ended on Nov. 20, with an initial conversion price of HK$20 per share.
GLAS Trust Company LLC is the conversion agent, as well as the trustee of the notes, mandatory convertibles and convertibles.
The new notes, mandatory convertibles and convertibles are expected to be listed on the Singapore Exchange effective Nov. 21.
Existing Sunac services shares, representing about 14.7% of the total issued shares as of Nov. 20, have been transferred to the relevant scheme creditors as part of the restructuring consideration, in exchange for the discharge and release of the relevant existing debt claims in the total amount of $775,152,782.
Following completion of the disposal of the shares, the company’s interest in the service shares has been reduced to about 49.7%, and Sunac Services remains a subsidiary of the company.
The global notes representing the existing instruments under the company’s existing debt (ISINs: XS2012954835, XS1594400449, XS1810024338, XS2201937211, XS1981089284, XS2075937297, XS2287889708, XS2212116854, XS2366526619, XS2100444772, XS2202754938, XS2287889963 and XS2360267954) are in the process of being canceled.
Prior developments
As previously reported, the company’s board of directors announced that the scheme was sanctioned by a court order at the petition hearing on Oct. 5.
The effectiveness of the scheme was conditioned on all 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 all the scheme conditions have been fulfilled and the scheme effective date was Oct. 5.
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 was hoping for the restructuring to take effect by Dec. 31, as previously noted.
Houlihan Lokey (China) Ltd. is the company’s financial advisor. Sidley Austin is the company’s legal counsel. Morrow Sodali is the information agent.
Sunac is a Tianjin, China-based residential and commercial property developer. The Chapter 15 case number is 23-11505.
| Issuer: | Sunac China Holdings Ltd.
|
| Total issue: | $9,454,635,435
|
| Trustee: | GLAS Trust Company LLC
|
| Counsel to issuer: | Sidley Austin
|
| Issue date: | Nov. 20
|
| Listing date: | Nov. 21
|
| Distribution: | Regulation S, Rule 144A and Regulation D
|
|
|
| Notes
|
| Amount: | $5,704,637,631
|
|
|
| Tranche A notes
|
| Amount: | $500 million
|
| Maturity: | Sept. 30, 2025
|
| Coupon: | 5%
|
| ISIN: | XS2708721233, XS2708721159, XS2708721076
|
|
|
| Tranche B notes
|
| Amount: | $500 million
|
| Maturity: | Sept. 30, 2026
|
| Coupon: | 5¼%
|
| ISIN: | XS2708721589, XS2708721316, XS2708721407
|
|
|
| Tranche C notes
|
| Amount: | $1 billion
|
| Maturity: | Sept. 30, 2027
|
| Coupon: | 5½%
|
| ISIN: | XS2708721829, XS2708721662, XS2708721746
|
|
|
| Tranche D notes
|
| Amount: | $1.5 billion
|
| Maturity: | Sept. 30, 2028
|
| Coupon: | 5¾%
|
| ISIN: | XS2708722397, XS2708722041, XS2708722124
|
|
|
| Tranche E notes
|
| Amount: | $1.5 billion
|
| Maturity: | Sept. 30, 2029
|
| Coupon: | 6%
|
| ISIN: | XS2708722637, XS2708722470, XS2708722553
|
|
|
| Tranche F notes
|
| Amount: | $704,637,631
|
| Maturity: | Sept. 30, 2030
|
| Coupon: | 6¼%
|
| ISIN: | XS2708722983, XS2708722710, XS2708722801
|
|
|
| Mandatory convertible bonds
|
| Amount: | $2,749,997,804
|
| Maturity: | Sept. 30, 2028
|
| Coupon: | 0%
|
| Initial conversion price: | HK$6 per share
|
| ISIN: | XS2708724096, XS2708724179, XS2708724419
|
|
|
| Convertible bonds
|
| Amount: | $1 billion
|
| Maturity: | Sept. 30, 2032
|
| Initial conversion price: | HK$20 per share
|
| ISIN: | XS2708723791, XS2708723874, XS2708723957
|
|
|
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