KWG Group Holdings Limited (1813, Debt Stock Codes: 40683 and 40117) on 23 February 2026 announced that it has reached an agreement in principle with a group of creditors holding over 25.8% of its offshore obligations. These obligations total US$3.95 billion in senior notes, US$380.00 million in syndicated bank loans, and US$334.00 million in other facilities (collectively the “In-Scope Debts”).

The company intends to implement the restructuring through a Hong Kong scheme of arrangement. Under the proposal, scheme creditors will choose between two options. Option 1 provides for a mix of cash, a zero-coupon exchangeable note linked to a property development project in Ap Lei Chau, and mandatory convertible bonds (the “MCBs”), with a cap of US$1.38 billion for this allocation. Option 2 allows for 100% of the principal to be converted into MCBs, which are voluntarily convertible at HK$1.55 per share and mandatorily converted on maturity.

The exchangeable note, capped at US$400.20 million, will be backed by the Ap Lei Chau project’s future income and supplemented by a limited guarantee in certain circumstances. A special purpose vehicle will raise approximately US$60.00 million in mezzanine funding to cover the upfront cash component, restructuring costs, and general working capital needs.

A shareholding structure stability arrangement requires a portion of MCBs otherwise due to scheme creditors to be issued to the chairman or designated parties, with disposal restrictions until certain trading or time conditions are met. Additionally, the company will conduct a rights issue prior to the restructuring effective date and receive up to US$10.00 million in new money from the chairman or family members. A new share award plan for management and employees, representing up to 3% of the company’s fully diluted share capital, is also included.

The formal restructuring support agreement is under negotiation. The company will continue to provide updates on any material developments as appropriate.