EMBATTLED Chinese property developer Fantasia said on Monday (Apr 29) that it has entered into a new agreement with its ad hoc group of bondholders to restructure its US$4 billion dollar bonds with new notes and equities.

The latest restructuring terms offered by the Shenzhen-based developer, which defaulted its offshore bonds in late 2021, were seen revised down from its first proposal published in early 2023, according to the term sheets published on Monday evening.

Cheering the restructuring agreement, shares of Fantasia jumped more than 11 per cent on Tuesday morning, outperforming the 0.4 per cent fall in the Hang Seng Mainland Properties Index.

Many Chinese property developers have defaulted since the sector slipped into a debt crisis in mid-2021 and a growing list of companies have reached restructuring agreement with their creditors.

Developers and creditors have said they expected the revamp terms to be tightened due to a worsening outlook for the country’s real estate sector.

Fantasia said in a filing on Monday it plans to swap US$1.3 billion of the debt into 45.2 per cent of enlarged shares in the company, and issue eight tranches of new notes maturing between 2026 and 2031, with cash interest ranging from 4.5 to 6.5 per cent.

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

Controlling shareholder Baby Zeng will inject US$6 million as a shareholder loan into the company, with an interest of 5 to 8 per cent per annum, and the “new money” will fund the fees and expenses of the proposed restructuring.

The terms compare to the first proposal in which the new notes had a maturity between 2024 and 2029, and interests ranging from 5 to 8 per cent, and Zeng and Guangdong government backed investor Gortune Alternative Fund Management were going to inject US$15 million and US$100 million, respectively.

Fantasia said it has gained support from the ad hoc group which held 32 per cent of the outstanding notes, and creditors will receive a 0.1 per cent consent fee if they support the proposal by May 21.

On Monday, Shanghai-based developer Cifi Holdings also said it has reached a restructuring agreement with its ad hoc group, while Shenzhen peer Kaisa Group said it aimed to iron out restructuring terms in the coming four weeks. REUTERS