The property market downturn became more obvious last year when the country’s 100 largest developers recorded 7.6 trillion yuan in sales, down 41.3 per cent from 2021, according to a report by independent real estate research firm China Index Academy.
In its filing on Friday, CIFI said it has made “significant progress” to formulate “a holistic solution” that would resolve the company’s liquidity issues. The firm said it has set up a coordination committee to commence “constructive discussions” on potential solutions with an ad hoc group of bondholders, or its advisers, no later than the end of this month.
According to the initial plan, creditors will not be required to accept any reduction in the principal amount of debt. CIFI, however, may offer creditors an option to voluntarily convert a proportion of the debt to equity or convertible bonds in the company.
CIFI expected the interest to be paid partially in cash and partially in the form of goods or services during an initial period. The company said its interest burden will need to be reduced to a certain amount, which would allow it to return to a position of long-term financial stability.
The firm also expected to extend the amortisation of the principal and maturity of its debts to no more than seven years from the date when the plan is fully implemented.
