March 30, 2022
The 4 billion yuan onshore bond will mature on April 1, 2024, but investors have a put option to sell back to the company on April 1 this year.
Chinese property developer Sunac China said on Wednesday it will hold an online meeting with holders of a 4 billion yuan ($629 million) bond, seeking to extend principal payment due on Friday by 18 months.
Hong Kong-listed shares of Sunac, China’s third-largest property developer by sales, jumped more than 21% on Wednesday afternoon, versus a 7% rise in the Hang Seng Mainland Properties Index .
The meeting with bondholders will take place on Thursday and Friday, when they will vote whether they accept the proposal. The onshore bond will mature on April 1, 2024, but investors have a put option to sell back to the company on April 1 this year.
Sunac said in separate filings that the extension proposal is designed to ensure the bond’s interest payment under its current operating status, and it has applied to suspend trading of the bond from Thursday.
The company said late last month it had prepared sufficient funding to repurchase the bond. Earlier in March it added a put option date of April 2023, on top of the existing option for this April.
To improve the credit risk profile of the bond, Sunac said in a filing that company chairman Sun Hongbin will provide a personal guarantee, and stakes and receivables of three project companies will be added as collateral.
The share price surge comes two days before the stock is due to be suspended under Hong Kong listing rules because the firm will not be able to publish unaudited 2021 financial results by the end of March.
The company said on Monday the delay in publishing results is because of ongoing communications with offshore creditors on debt solutions after recent downgrades by global rating firms, as well as the proposed put option extension of its onshore bonds.
- Reuters, with additional editing by George Russell