Analysis-As Evergrande faces delisting, China property debt revamp drags on
Private developer Country Garden, which defaulted on $14 billion offshore debt in 2023, is still trying to get its lenders' approval on its debt restructuring proposal before the next liquidation hearing on August 11.
Other developers including KWG and Agile have yet to announce detailed restructuring proposals after having started the process in 2023 and 2024, respectively, soon after defaulting on their repayment obligations.
Logan and Powerlong, on the other hand, have cut their offers to bondholders more than once, but have yet to secure approval from their creditors, said two people with knowledge of the matter said.
The people declined to be identified as they were not authorised to speak to the media.
Evergrande's liquidators, Country Garden and HKEX declined to comment. KWG, Agile, Logan and Powerlong did not respond to requests for comment.
Advisers expect some developers, especially privately-owned ones, to go through more than one or even two rounds of debt revamp in the absence of an improvement in home sales outside China's top cities and the availability of funding channels.
'CONTINUOUS DELEVERAGING'
China's property sector accounted for about a quarter of the country's economic activity before it collapsed.
But despite repeated attempts by authorities to stabilise the market, property investment in China declined 11.2% in the first half of this year from a year earlier, while property sales by floor area fell 3.5% and new construction starts dropped 20%.
This year, Shimao and state-backed Sino-Ocean were among the latest to set a date for implementing restructurings after years of wrangling with creditors, according to their regulatory filings.
Sunac became the first developer earlier this year to propose a second restructuring to swap all its restructured notes into mandatory convertible bonds and has gained sufficient creditors approval.
Zhongliang also successfully extended the maturity of all its restructured bonds by two years.
Kaisa's restructuring plan, already approved by creditors and courts, however, has not yet gained the greenlight from China's top economic planner, as the plan involves new debt, two other people said.
Kaisa and NDRC did not respond to request for comment.
"There's no one single playbook; each restructuring plan must be tailored to a company's unique capital and creditor structure," said Una Ge, a Hong Kong-based partner at consultancy firm AlixPartners.
"For privately-owned developers, however, the clear trend is a need for continuous deleveraging, as a single round of restructuring is often insufficient to keep them afloat."
($1 = 7.8499 Hong Kong dollars)
($1 = 7.1793 Chinese yuan renminbi)
(Reporting by Clare Jim; Editing by Sumeet Chatterjee and Kim Coghill)
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