Sunac China gives results of scheme meeting, ups convertibles cap

By Marisa Wong

Los Angeles, Sept. 18 – Sunac China Holdings Ltd. issued two updates on its offshore debt restructuring on Monday.

One of the updates was to disclose the results of the scheme meeting, and the other update was about an increase in the cap on mandatory convertible bonds to be issued (optionally) as part of the restructuring consideration.

Successful scheme meeting

As directed by the High Court of Hong Kong, a meeting was held at 11 p.m. ET on Sept. 17 for scheme 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.

The company said it will now proceed to seek the approval and sanction of the court in respect of the scheme.

The petition seeking sanction of the scheme will be heard at 9:30 p.m. ET on Oct. 4.

Mandatory convertibles cap

Based on overwhelming interest by scheme creditors to elect to receive mandatory convertible bonds as part of the restructuring consideration, the company is increasing the cap on those bonds.

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

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

The company obtained at a previous extraordinary general meeting shareholder approval for, among other things, the issue of mandatory convertible bonds and a specific mandate in respect of mandatory convertible bond conversion shares on the basis that the cap for the aggregate amount of mandatory convertible bonds (which the scheme creditors have the option to elect) is $2.2 billion.

Under the restructuring support agreement, the original cap of the aggregate amount of the mandatory convertible bonds was $1.75 billion, and the company has the discretion to increase the cap.

Based on the scheme creditors’ non-binding election of the mandatory convertible bonds as part of the restructuring consideration, which is indicative of the level of interest of the scheme creditors towards the mandatory convertible bonds as part of the restructuring consideration, the company has determined that the cap of the mandatory convertible bonds will be increased to $2.75 billion.

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

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