China’s property-debt crisis has entered a new stage, as tensions have increasingly shifted to developers’ court battles with creditors over debt restructuring plans, and the once-unthinkable consequence of liquidation orders.
At least 23 Chinese builders or related companies have so far received wind-up petitions in Hong Kong from creditors since the beginning of the real estate crisis, according to Bloomberg-compiled data. So far, at least five of them have been ordered to wind up.
That includes China Evergrande Group, whose liquidation order sent shock waves through the sector, underscoring the legal risk of failing to assuage the concerns of key groups of creditors. Adding to the company’s troubles, the nation’s top securities regulator fined its main onshore unit for falsely inflating revenue by more than $78 billion in the two years leading up to its failure.
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Smaller peers, including Redsun Properties Group Ltd. and Kaisa Group Holdings Ltd., will face hearings in the city in the coming weeks. The list of court battles is likely to expand: Chinese developers have defaulted on $111 billion of onshore and offshore bonds since the nation’s real estate crisis began in 2021, according to Bloomberg-compiled data.
The following list includes key dates and the progress of offshore debt-restructuring efforts for China’s biggest defaulted developers by total liabilities. Debt figures are based on Bloomberg-compiled data and public filings. The estimated size of debt restructuring is based on debt-claim disclosures, existing offshore debt or offshore interest-bearing liabilities in public filings.
China Evergrande Group
Total Liabilities: $332 billion Estimated offshore debt restructuring size: At least $38 billion Next to watch: Liquidation process, delisting risk The developer could be delisted from Hong Kong’s stock exchange if its shares remain suspended for more than 18 months, after the clock started ticking in January with a judge’s liquidation order Almost all of Evergrande’s assets are in mainland China, presenting potential legal hurdles for non-Chinese administrators READ: A 99% Bond Wipeout Hands Hedge Funds a Harsh Lesson on China Country Garden Holdings Co.
Total Liabilities: $189 billion Estimated offshore debt restructuring size: Unclear Next to watch: Court hearing on May 17 A unit of Kingboard Holdings Ltd., a Hong Kong laminates maker, filed a winding-up petition against the developer in February The developer said the lawsuit won’t have a significant impact on its overall restructuring of overseas debt READ: Country Garden Liquidation Threat Shows Power of Tiny Creditors Sunac China Holdings Ltd.
Total Liabilities: $139.4 billion Estimated offshore debt restructuring size: About $10 billion Next to watch: Restructuring payments At least 2% of the interest must be paid in cash from the second year of the restructuring, according to the debt plan For now, the developer could make paid-in-kind interest payments, a design that helps alleviate short-term cash pressure READ: China’s Shattered Property Bond Market Finds Hope in Sunac Deal Shimao Group Holdings Ltd.
Total Liabilities: $71.1 billion Estimated offshore debt restructuring size: About $12 billion Next to watch: Restructuring plan details Shimao proposed a preliminary restructuring framework in December, aiming to deleverage by as much as $7 billion Key elements of the plan include exchanging existing debt for new notes backed by offshore assets and equity-linked instruments READ: Shimao’s Restructuring Projection Could Be Overoptimistic: React Yango Group Co.
Total Liabilities: $38.2 billion Estimated offshore debt restructuring size: Unclear Next to watch: Onshore restructuring process, offshore unit liquidation The liquidators of the developer’s offshore unit, Yango Justice International, appointed in April, haven’t provided any public updates The parent company was delisted in Shenzhen last year READ: China Builder Yango’s Unit Gets Wind-Up Order in First in HK (1) China Aoyuan Group Ltd.
Total Liabilities: $33.7 billion Estimated offshore debt restructuring size: More than $6 billion Next to watch: Operations of the company Aoyuan is allowed to make paid-in-kind interest payments in the first two years of the restructuring Creditors have pushed the developer to continue with urban-renewal projects to support the restructuring plan, according to a filing READ: China Aoyuan Wins Court Approval on Debt Plan Amid Dissent Kaisa Group Holdings
Total Liabilities: $32.7 billion Estimated offshore debt-restructuring size: More than $12 billion Next to watch: Court hearing on April 29 At a March hearing, the original petitioner in Kaisa’s liquidation case asked to quit and an influential group of creditors with more than a third of its offshore borrowings sought a replacement The developer earlier said a creditor group rejected parts of its debt plan and talks are continuing READ: Kaisa’s Key Creditors Join Lawsuit in Twist to Wind-Up Case Logan Group Co.
Total Liabilities: $31.7 billion Estimated offshore debt restructuring size: About $8 billion Next to watch: Signing agreement with creditors in April The developer aims to sign support agreements with all creditor groups for its offshore debt restructuring plan by the end of April Logan has offered a consent fee to bondholders who sign the deal before March 28 READ: China Builder Logan Gets Respite as Liquidation Petitions Fail CIFI Holdings Group Co.
Total Liabilities: $26.5 billion Estimated debt restructuring size: About $7 billion Next to watch: Details of a restructuring plan CIFI sold some property in Sydney in February, partially to raise funds to support its offshore restructuring, it said The developer said it expects no haircut in its restructuring, and may propose an option to convert some debt to equity or convertible bonds READ: Chinese Builder CIFI Lays Out Plans for Offshore Debt Revamp Sino-Ocean Group Holding Ltd.
Total Liabilities: $26.5 billion Estimated offshore debt restructuring size: Unclear Next to watch: Details of a restructuring plan The developer said in February that it would continue to work with advisers on a restructuring proposal Earlier, a creditor group urged the developer to come up with a broad restructuring blueprint for all bondholders with the support of major shareholder China Life Insurance Co.
