China: CIFI Holdings gets bondholder approval on restructuring plan

HONG KONG: Embattled Chinese property developer CIFI Holdings said on Monday it has reached agreement with a key group of bondholders on a plan to restructure its offshore debt.

A key group of bondholders has agreed "in principle" on the key terms of a proposal offered by CIFI, the company said in a filing to the Hong Kong stock exchange. The group holds or controls approximately 43% in aggregate of the principal amount of CIFI's offshore notes and bonds.

Shanghai-based CIFI defaulted on payments tied to a convertible bond in October, 2022, and has been working with its creditors for repayment solutions since.

CIFI's proposal comes at a time when many Chinese developers are still struggling with rising debt as property sales in China remain sluggish. A growing number of them have defaulted on their repayment obligations since the debt crisis began in mid-2021, and a handful have been ordered by the courts to be liquidated so far.

Under the debt restructuring proposal, creditors will have the option to receive cash, with at least an 85% haircut, or a mixture of new notes, new loans, and the company's shares, with smaller or no haircuts, while CIFI intends to cut its offshore debt by around $3.3 billion to $4 billion.

CIFI said it was still in negotiations with its creditors, including the key bondholder group and a separate group of lenders. The company has not yet entered into any legally binding agreement.

It said 68 of the company's projects had been shortlisted under the "whitelist" scheme initiated by the Chinese government to inject liquidity into the crisis-hit sector to help developers finish the construction of property projects.

Shares of Chinese property developer CIFI Holdings jumped as much as 25% to HK$0.375, their highest since March 4, after the filing.