Sunac China noteholder files winding-up petition; restructuring talks ongoing

By Wendy Van Sickle

Columbus, Ohio, Sept. 9 – Sunac China Holdings Ltd. received on Thursday a winding-up petition filed against it in the High Court of the Hong Kong Special Administrative Region by Chen Huaijun, a noteholder who claims the company failed to repay $22 million principal amount of senior notes he holds and the related interest, according to an announcement from the company’s board of directors.

If the company is ultimately wound up as a result of the petition, any disposition of the property directly owned by Sunac China, excluding the property of its subsidiaries, any transfer of shares of the company, or alteration in the status of the members of the company, made after the commencement date of the winding up on Sept. 7, will be void unless a validation order is obtained from the court, the company reported.

Any disposition of the property, transfer or alteration made on or after the commencement date will not be affected if the petition is struck out, dismissed or permanently stayed.

Sunac China said it will vigorously oppose the petition.

The board of directors said their view is that the petition does not represent the interests of other stakeholders and may impair the value of the company.

Restructuring

Sunac China said it has worked closely with its legal and financial advisers to formulate a viable restricting plan aimed at addressing liquidity constraints, enhancing the credit profile of the group and protecting the interests of all stakeholders.

The company said it has maintained active dialogue with its offshore creditors, seeking to reach an agreement on the terms of an offshore restructuring solution as soon as possible.

The discussions have been conducted primarily via an ad hoc group of offshore creditors that comprises large institutional holders of the company’s offshore debt.

“To date, considerable progress has been made. Offshore creditors have generally been patient, supportive and appreciative of the company’s efforts to advance the restructuring process in an expeditious, professional, and transparent manner – and understand that in the circumstances, reaching agreement on the terms of an offshore restructuring solution provides the best means of preserving value and protecting the interests of all stakeholders,” the company said.

“The company intends to continue proactively communicating and working with the ad hoc group and other relevant offshore creditors on the restructuring plan, with the objective of announcing terms to the market as soon as practicable with a target of no later than the end of this year.”

Sunac China said it does not believe the winding-up petition will have a meaningful impact on the offshore restructuring process or timetable.

Trading in shares of the company has been suspended on the Stock Exchange of Hong Kong Ltd. since April 1, 2022.

Sunac is a Tianjin, China-based residential and commercial property developer.

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