On the evening of January 10th, 2025, Sunac China Holdings Limited (Sunac China) publicly responded to the winding-up petition filed by China Xinda (Hong Kong) Asset Management Limited, stating that the company will seek legal measures to strongly oppose the petition.
Sunac China announced in an insider information disclosure on the 10th that it had received a winding-up petition filed against the company by China Xinda (Hong Kong) Asset Management Limited in Hong Kong, with a hearing scheduled for March 19, 2025.
In a further announcement on the evening of the 10th, Sunac China stated that the winding-up petition filed by China Xinda (Hong Kong) Asset Management Limited pertains to Shining Delight Investment Limited (an indirect wholly-owned subsidiary of the company) failing to repay the loan to the petitioner where the company acted as a guarantor, involving a principal amount of $30 million US dollars and accrued interest.
The announcement clarified that the filing of the petition does not guarantee success in winding up the company, and Sunac China does not believe that the petition will have a substantial impact on its operations. However, it may lead to other creditors seeking accelerated repayment of related debts or taking enforcement measures, potentially resulting in the company’s inability to fulfill other overseas payment obligations at maturity or within relevant grace periods. Sunac China stated that it will seek legal measures to staunchly oppose the petition and take all necessary actions to protect its legal rights.
The announcement also mentioned that “the company is actively communicating with the petitioner to seek an effective resolution based on fairness to other creditors, including urging the petitioner to withdraw or reject the petition as soon as possible.”
The latest winding-up petition has had a certain impact on the market and investor confidence. On the 10th, Sunac China’s stock price plummeted by as much as 28.57% during trading hours, closing at HK$1.30 per share, a decrease of 25.71%, with a total market value of approximately HK$12.098 billion by the market close on January 10th, 2025.
According to a report by First Financial on January 10th, Sunac China’s onshore debts are currently in the stage of a second restructuring, and its offshore debts may also enter a renegotiation phase. Sunac China stated in the announcement that given the impacts caused by the petition and considering the current market conditions falling short of expectations from the earlier restructuring of offshore debts, it does not rule out further realigning with current circumstances to seek a more comprehensive integrated solution for its offshore debts.
Furthermore, on the 10th, Sunac China also issued notices to suspend trading of its corporate bonds “PR Sunac 01” and “20 Sunac 02” from the market opening on January 13, 2025, as both bonds have had the “Resolution on the Current Period Bond Restructuring” approved.
This is not the first time Sunac China has faced a winding-up petition. According to a report by Daily Economic News on January 10th, on September 8, 2022, a creditor named Chen Huaijun, holding principal of $22 million US dollars and accrued interest in senior notes, had previously filed a winding-up petition against Sunac China. However, in June 2023, Sunac China announced that the High Court of Hong Kong had ordered the withdrawal of the petition.
Since Sunac China encountered a liquidity crisis, China Xinda has played the role of a “white knight” several times. In January 2024, Guangdong Xinda Real Estate, China Xinda, and Xinda Capital jointly invested to establish the Wuhu Xinhui Industrial Investment Partnership (Limited Partnership) with 975 million RMB to acquire 51% equity of Hainan Haikou City held by Hainan Sunac and the corresponding debt rights. After the acquisition, China Xinda took over the entire Sunac Hainan Haikou City project. The timing of Xinda’s winding-up petition against Sunac China coincides with a critical juncture in Sunac China’s domestic debt restructuring.
Market sources suggest that Sunac China may not be able to repay its USD bonds due in September 2025 on time, prompting a potential second restructuring of its offshore debts. A preliminary restructuring plan could be available as early as March.
With the decline in China’s real estate industry, property developers relying on high debt levels have encountered financial difficulties, leading to a significant decrease in debt repayment capabilities. Several real estate developers, including Country Garden, CIFI Holdings, China Evergrande, Sinic Holdings, Fantasia Holdings, Sunac China Holdings, and Xiangsheng Holdings, have faced similar winding-up petitions. Among them, Sinic Holdings and China Evergrande have already received winding-up orders, while more winding-up petitions against real estate developers have been withdrawn after negotiations, temporarily averting debt default crises.
The winding-up petition against Sunac China for inability to repay $30 million US dollars has sparked discussions among internet users. A netizen named “Doraemon’s D” commented, “Sunac is also in such a dire situation. It seems that the cold winter in the real estate industry has not passed yet. Can active communication prevent winding-up?”
“Guitarist Sun Falls” also remarked, “It is due to debt disputes, right? Sunac still has $295 million US dollars in offshore debts. It remains to be seen whether this can be resolved smoothly this time. After all, the longer it takes, the more disadvantageous it becomes.”
Public information shows that Sunac China is a company listed on the Hong Kong Stock Exchange specializing in residential and commercial comprehensive real estate development. The company has numerous projects at various stages of development in Beijing, Tianjin, Shanghai, Chongqing, and Hangzhou, covering high-end residences, villas, commercial properties, and office buildings in different types of real estate.
On January 9, 2020, Hurun Research Institute released the “2019 Hurun China Top 500 Private Enterprises” report, ranking Sunac China Holdings as the 35th largest company by market value of 153 billion RMB.
On March 17, 2020, Sunac China Holdings Limited was ranked 5th in the “2020 Top 100 Real Estate Enterprises in China.” In August 2021, Sunac China was ranked 364th in the complete list of the 2021 Fortune Global 500.