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Shares of Sunac China, one of the country's formerly high-flying property developers, dropped 55 per cent on Thursday after resuming trading for the first time in more than a year, The Wall Street Journal reported.
Sunac China Holdings was among dozens of real-estate companies that defaulted on their international bonds over the past 18 months. According to WSJ, its Hong Kong-listed shares were suspended after it missed a deadline to file its annual report in March 2022. The 20-year-old developer recently reported the equivalent of USD 4 billion in losses for 2022 and a 51 per cent drop in revenue. It said last month that it expects business to gradually recover. Sunac, which has about USD 9 billion in offshore debt, has also reached a debt-restructuring agreement with an ad-hoc group of offshore creditors. Sunac proposed plans to restructure debt in December that included converting up to USD 4 billion of offshore liabilities into ordinary shares or equity-linked instruments. In March, the developer announced it had reached an agreement with a group of creditors but analysts were sceptical about the plan, saying Sunac would struggle to win approval from offshore creditors, according to WSJ. Since 2020, Beijing has cracked down on excessive debt in the property sector, leaving major players such as China Evergrande Group and Sunac struggling to make payments and forcing them to renegotiate with creditors as they teetered on the edge of bankruptcy. The crisis deepened in 2022 after buyers across the country, furious at lagging construction and delayed deliveries of their properties, withheld mortgage payments for homes sold before completion. (ANI)
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