Claire Jim
HONG KONG (Reuters) – Struggling Chinese property developer Fantasia said on Monday it had reached a new agreement with a special group of bondholders to restructure its $4 billion bond using new bonds and shares.
The latest restructuring terms offered by the Shenzhen developer, which defaulted on its offshore bonds at the end of 2021, have been revised downwards from the first offer issued in early 2023, according to term sheets published on Monday evening.
Welcoming the restructuring agreement, shares of Fantasia jumped more than 11% Tuesday morning, outpacing the Mainland Properties Index’s 0.4% decline.
Many Chinese property developers have defaulted since the sector plunged into a debt crisis in mid-2021, and a growing number of companies have reached restructuring agreements with their creditors.
Developers and lenders said they expect redevelopment conditions to tighten as the outlook for the county’s real estate sector worsens.
In a statement Monday, Fantasia said it plans to swap $1.3 billion in debt for 45.2% of the company’s increased shares and issue eight tranches of new notes due between 2026 and 2031 at a cash-on-cash rate. ranging from 4.5% to 6.5%.
Controlling shareholder Baby Zeng will inject $6 million into the company as an equity loan at an interest rate of 5-8% per annum, with the “new money” covering the fees and costs of the proposed restructuring.
The terms are compared to the first offering, in which the new bonds had maturities between 2024 and 2029 and an interest rate ranging from 5% to 8%, and investor Gortune Alternative Fund Management, backed by the Zeng and Guangdong government, was looking to put in between 15 and 100 million dollars. respectively.
remove advertising
.
Fantasia said it had received support from a special interest group that held 32% of the outstanding bonds, and lenders would receive a 0.1% consent fee if they back the proposal by May 21.
On Monday, Shanghai-based developer CIFI Holdings also said it had reached a restructuring agreement with its special purpose group, while fellow Shenzhen-based Kaisa Group said it aimed to agree the terms of the restructuring in the next four weeks.