Chinese developer Yuzhou Group announced its debt restructuring plan, joining industry peers Evergrande Group, Sunac China Holdings, and Shimao Group, who are also seeking a revamp as sector conditions continue to deteriorate even as authorities roll out supportive policies, reports the South China Morning Post. The Hong Kong-listed property firm on Sunday night said in a filing that it is in active discussions with its offshore creditors and has formulated a preliminary restructuring proposal.
The Shenzhen-based company has offered three options to its creditors. Those opting for the first option can exchange the existing notes for new notes with a short-term maturity (STN) while those choosing the second option would receive medium term notes (MTNs), newly issued ordinary shares of the company and long term notes (LTN). The third option would involve swapping the notes for LTNs which bear zero interest but with no haircut to the outstanding principal amount of the existing notes.
“The company believes that the successful implementation of its offshore debt restructuring would allow it to right size its balance sheet and restore its capital structure to a healthy and sustainable level such that the group’s business would be able to continue as a going concern and thrive moving forward,” it said.