Country Garden's domestic and overseas debt restructurings have been successively implemented, which can reduce debts by over 90 billion yuan.
On the evening of December 4th, Country Garden issued an announcement stating that the restructuring plans for a total of nine onshore bonds issued under different themes by the company have all been approved by the relevant bondholders. This means that Country Garden has successfully restructured its onshore and offshore debts, taking another substantial step in resolving its overall debt risks.
The announcement shows that the restructuring plans for one onshore corporate bond issued by Country Garden, seven onshore corporate bonds issued by its subsidiary Country Garden Real Estate Group Co., Ltd. ("Country Garden Real Estate"), and one onshore corporate bond issued by its subsidiary Tengyue Construction Technology Group Co., Ltd. ("Tengyue Construction Technology") have been voted through at the relevant bondholders' meetings. The principal and interest repayment arrangements for the nine bonds will be adjusted. Among them, the three issuers will provide the above - mentioned bondholders with restructuring plan options including buy - back options, stock options, and general creditor options.
The total amount of the above - mentioned onshore debts is approximately 13.77 billion yuan. Judging from the core content of the plan, it is expected that the principal can be reduced by more than 50%, the term will be extended up to 10 years at most, and it is clear that there will be no repayment pressure in the next five years.
36Kr learned that on December 4th, Country Garden's offshore debt restructuring plan worth approximately $17.7 billion was also officially approved by the High Court of Hong Kong.
The offshore debt restructuring plan was previously voted through by the relevant bondholders on November 5th. Among them, the amount of claims corresponding to the votes in favor in Group 1 (syndicated loan group) accounted for 83.71% of the amount of claims of those who attended and voted in Group 1, and the amount of claims corresponding to the votes in favor in Group 2 (US dollar bonds and other claims) accounted for 96.03% of the amount of claims of those who attended and voted in Group 2.
It is estimated that the overall debt reduction scale of this onshore and offshore debt restructuring exceeds 90 billion yuan, greatly alleviating the repayment pressure in the next five years.
Liu Shui, the director of enterprise research at the China Index Academy, said that from a financial perspective, Country Garden's short - term debt repayment pressure has suddenly decreased, significantly improving its balance sheet. First, the restructuring of Country Garden's offshore debts can reduce debts by approximately $11.7 billion, corresponding to approximately 84 billion yuan of interest - bearing debts. The financing costs of the new debt instruments have mostly been significantly reduced to a low range of 1.0% - 2.5%, and the longest debt term is up to 11.5 years. It can save huge debt expenditures every year, and there will be no concentrated repayment pressure in the next five years. The debt repayment pressure has suddenly decreased, providing a precious buffer period for the recovery of operations. Second, the recognition of a maximum of approximately 70 billion yuan in restructuring gains will increase the net assets and significantly improve the balance sheet, winning a window period for strategic transformation.
At the recent management meeting of Country Garden, Yang Huiyan, the chairman of the group's board of directors, said, "The approval of the restructuring is the creditors' recognition of the company's future, which will strive for more lenient space for the company to resume normal operations. Next, it is necessary to systematically promote the transition. The transition is a transformation and is also Country Garden's'second - start - up'."