Sunac China cuts costs on US$715 million defaulted debt linked to Beijing project
Restructuring terms allow the Chinese developer to effectively cut its annual borrowing costs to 4.12 per cent from 9.6 per cent
Sunac China, one of China’s biggest home builders, managed to lower its borrowing costs and averted a penalty after restructuring a 5.2 billion yuan (US$715.6 million) outstanding debt linked to a prime residential and commercial project in Beijing.
The developer signed an agreement with China Credit Trust and China CITIC Financial Assets to repay the debt owed by its unit Beijing Oceanwide Dongfeng Real Estate over four years to January 2029, according to a Hong Kong stock exchange filing on Monday. The company had trimmed the initial debt by 1.64 billion yuan before it defaulted in September 2023, it said.
Sunac said the creditors have agreed to waive the default cost, reduce the overdue accrued interest to 650 million yuan, and lower the annual interest on the outstanding debt to 6.5 per cent from 9.6 per cent. This effectively cut its borrowing costs on the original debt to 4.12 per cent from the borrowing date, it added.
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This has provided “a complete exit solution” for the trust investors and effectively reduced the debt pressure of the project, providing the project with more solid financial support, Sunac said.
