Sunac China rebounds and "comes ashore"

Author | Zhou Zhiyu

Editor | Zhang Xiaoling

Recently, Sun Hongbin, who has not been publicly seen for a long time, made a low-key appearance in Chongqing to inspect Sunac China's key project in the area—Chongqing Bay. His appearance also signals that the daring and proactive Sunac is returning to the right track of operations.

On December 23, Sunac China officially announced that its offshore debt restructuring plan is now in effect. With this, the debt risk at the listed company level has been completely resolved, laying a solid foundation for a comprehensive recovery in operations. This also marks the completion of a comprehensive restructuring of both domestic and foreign debts after three years of deep adjustments, steering into a new path of sustainable operational recovery.

Sunac has finally welcomed the moment of lightening its load.

According to the restructuring plan, Sunac's offshore debt is basically cleared to "zero," completely resolving the debt risk at the listed company level. Through methods such as debt-to-equity swaps, Sunac's overall debt repayment pressure is expected to decrease by nearly 60 billion yuan, with net assets subsequently increasing and financial stability significantly enhanced.

Sunac's path to debt resolution is a systematic breakthrough.

At the beginning of the industry adjustment, Sunac did not choose to lie flat but instead completed the first step of "exchanging time for space" through the extension of 16 billion yuan in domestic public bonds, becoming a benchmark case for policy implementation at that time. However, as the depth and breadth of the industry adjustment exceeded expectations, the dual pressures from sales and financing made mere extensions unsustainable.

In the face of difficulties, the industry urgently needed effective solutions to fundamentally resolve debt issues. Sunac, leveraging a market-oriented approach, launched a set of "combined punches."

From completing the domestic public bond restructuring in January this year to the formal effectiveness of the offshore debt restructuring now, Sunac has advanced one of the largest and most complex creditor restructuring cases in the industry in recent years. This plan is not only highly innovative but also reflects Sun Hongbin's personal commitment—major shareholders deeply bind their interests with the company, first providing personal unlimited joint liability guarantees for the extension of domestic debts, and later converting the previously provided $450 million interest-free loan into equity on equal terms with creditors during the offshore debt restructuring.

This determination to share risks ultimately won 98.5% approval from creditors, allowing this plan to be quickly referenced by a large number of real estate companies, which has extraordinary significance for accelerating risk clearance across the entire industry.

For a real estate company in a recovery phase, this is akin to obtaining a "rebirth" entry ticket. The successful debt resolution further consolidates confidence from all parties, paving the way for risk resolution at the project level, asset revitalization, and the restoration of long-term credit.

Data does not lie. While restructuring debts, Sunac's operational fundamentals are also fully recovering. This year, Sunac is expected to deliver over 50,000 new homes, with a cumulative delivery of over 700,000 homes in four years, completing all delivery tasks ahead of the industry.

On the product side, Sunac has returned to the center stage with high-quality assets and strong product capabilities. Shanghai Yihua's annual sales exceeded 22 billion yuan, ranking first in national single-project sales; Beijing Sunac Yihua consistently ranks in the top three for luxury homes priced over 30 million yuan in Beijing; Tianjin Meijiang Yihua's second phase ranks first in the high-end market; Wuhan Optics Valley Yihua sold nearly 90% on the opening day. These figures prove that Sunac's "golden signboard" still holds strong appeal in the luxury housing market Sunac's successful landing is not an isolated case, but a reflection of the accelerated clearing of industry risks.

Since the beginning of this year, the process of real estate debt restructuring has been continuously accelerating, and the industry is moving from individual breakthroughs to collective "ice-breaking." According to incomplete statistics, as of now, 21 distressed real estate companies have completed debt restructuring or reorganization.

Behind this string of numbers is the establishment of a core consensus in the real estate industry: resolving debt risks is a key prerequisite for real estate companies to restore healthy operations. From early confusion to the successful breakthroughs of multiple real estate companies today, the industry has explored a feasible path.

In this round of industry-wide self-rescue wave, Sunac, as the first large real estate company to complete comprehensive debt restructuring both domestically and internationally, has emerged with an innovative solution that benefits multiple parties, undoubtedly providing a highly valuable "benchmark sample" for the subsequent relief of more real estate companies. Industry experts point out that Sunac's debt resolution path profoundly reflects the pioneering exploration of real estate companies to restore normal operations during volatile cycles, and has important reference value for assessing the direction of industry risk clearance.

With the effectiveness of the overseas debt restructuring, Sunac has officially entered a new track of positive circulation.

Looking at Sunac's assets, its total land reserve area exceeds 124 million square meters, with nearly 70% distributed in core first- and second-tier cities. These high-quality asset reserves, after the lifting of the debt shackles, will become a solid guarantee for Sunac's subsequent asset revitalization and value return.

Sun Hongbin's appearance in Chongqing Bay may just be the beginning.

From the darkest moment three years ago to now welcoming the dawn of debt restructuring alongside 21 other real estate companies in the industry, Sunac has demonstrated a "phoenix" breakout story through practical actions