By P.R. Venkat
Zhenro Properties said it has made significant progress with its offshore debt restructuring, allowing the Chinese company to issue new U.S. dollar bonds starting next year.
The developer entered a restructuring term sheet agreement with certain debtholders that hold about 27.1% of the aggregate outstanding principal amount of senior notes and perpetual securities issued by Zhenro, it said late Wednesday.
The company said its offshore creditors could exchange their offshore debt and accrued unpaid interest into four series of new U.S. dollar-denominated senior notes with maturities ranging from four to seven years.
Like many Chinese property developers, Zhenro faces a severe liquidity crisis as the sector is under extreme stress due to falling property sales and weak consumer confidence.
This downturn has led to defaults by several developers, including China Evergrande Group and Sunac China Holdings.
Zhenro said some of its assets will also be offered as collateral for new notes.
If the proposed restructuring is accepted by debtholders and approved by relevant authorities, Zhenro said it would obtain the necessary financial flexibility and time to stabilize its business.
As of the end of June, Zhenro had interest-bearing liabilities of approximately $3.9 billion in terms of offshore debt, mainly comprising U.S. dollar and yuan notes in the aggregate principal amount of about $3.4 billion and perpetual securities amounting to $200.0 million.
Write to P.R. Venkat at [email protected]
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