Sunac China gets U.S. recognition of restructuring, says effective date will be Nov. 20

By Mary-Katherine Stinson

Lexington, Ky., Nov. 17 – Sunac China Holdings Ltd. gained U.S. recognition of its Hong Kong-based proceedings on Friday and said it expects its restructuring effective date to be Nov. 20, according to an order and notice.

The company said it expects all the restructuring conditions to be satisfied by that date.

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.

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 was 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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