SUNAC (01918) announced that as stated in the company's announcement dated June 24, 2025, consenting creditors holding approximately 75% of the total outstanding principal amount of existing debt had joined the restructuring support agreement as of that announcement date. The consenting creditors who have joined the restructuring support agreement have committed to take all necessary actions, including voting in favor of the scheme at scheme meetings for all outstanding principal amounts of existing debt they hold as of the record date.
The restructuring scope includes offshore debt issued or guaranteed by the company. As of June 30, 2025, the estimated debt claims (including principal and accrued unpaid interest, but excluding default interest) totaled USD 9.552 billion, subject to review and determination by the scheme administrators. The restructuring will involve the discharge of the company's debt and certain obligations of other entities within the group.
Under the special mandate, mandatory convertible bonds will be issued as consideration for the cancellation of existing debt and discharge of related claims. Subject to the equity structure stability plan, two series of mandatory convertible bonds (as restructuring consideration) will be distributed to scheme creditors. The aggregate principal amount of Mandatory Convertible Bonds 1 and Mandatory Convertible Bonds 2 shall equal the total claim amount of all scheme creditors.
Subject to the terms of the restructuring and applicable laws and regulations, scheme creditors may choose Mandatory Convertible Bonds 1, Mandatory Convertible Bonds 2, or a combination of both. Additionally, subject to the terms of the restructuring support agreement, early bird consent fees or basic consent fees (if applicable) received by relevant consenting creditors under the restructuring support agreement will be paid in the form of Mandatory Convertible Bonds 1 at face value on or before the restructuring effective date. Consent fees are not subject to the equity structure stability plan.
Connected Mandatory Convertible Bond Issuance includes: (1) Issuance to Sunac International (as a scheme creditor) - As of this announcement date, Sunac International is a holder of Sunac International mandatory convertible bonds. Therefore, similar to other holders of existing debt, under the selection and allocation mechanism, the Sunac International mandatory convertible bonds held by Sunac International will be converted to mandatory convertible bonds during restructuring. (2) Issuance to Mr. Sun Hongbin under the equity structure stability plan - To maintain equity structure stability, ensure Mr. Sun Hongbin's continued value contribution to the group's delivery guarantee, debt risk resolution and long-term business recovery, and consolidate confidence while better integrating resources, it is proposed to allocate conditional restricted shares to major shareholders or their designated persons through restructuring to maintain Mr. Sun Hongbin and/or his designated persons' equity ratio at a certain level.
Specifically, under the equity structure stability plan, for every USD 100 principal amount of mandatory convertible bonds allocated to scheme creditors (excluding those attributable to Sunac International), USD 23 of mandatory convertible bonds will be issued to Mr. Sun Hongbin or his designated persons.
Regarding the adoption of the team stability plan, as stated in the company's announcement dated April 17, 2025, the group's continued promotion of delivery guarantee, debt risk resolution, asset revitalization and long-term operational recovery and performance requires a stable and capable team's full commitment and active engagement to continuously contribute and create value. Considering the urgent need to stabilize the team and the uncertain and scarce funding sources for future employee compensation, the group proposes to adopt a team stability plan. Under this plan, the group will grant shares to selected employees through allotment and issuance of new shares as a long-term supplementary source of compensation in accordance with listing rules. The team stability plan also aims to incentive grantees to continue contributing to the group in the future, promoting the group's sustainable operation and long-term business recovery and development.
The board proposes to seek shareholder approval at a special general meeting through ordinary resolution to increase the authorized share capital from HKD 1.5 billion (divided into 15 billion shares) to HKD 3 billion (divided into 30 billion shares) by adding an additional 15 billion unissued shares, which will rank pari passu in all respects.
To facilitate the proposed transactions under the restructuring, including mandatory convertible bond issuance (including connected mandatory convertible bond issuance) and adoption of the team stability plan, considering that the company's authorized share capital as of this announcement date is insufficient to cover the number of new shares to be issued under the aforementioned transactions, and considering the group's subsequent business development and providing more flexibility for the company's future fundraising, the board proposes to increase the authorized share capital. The board believes that increasing the authorized share capital is in the overall interests of the company and shareholders.