Distressed Chinese developer CIFI offers up new proposal hoping to slash US$7 billion offshore debt by half
- The proposal offers creditors five options to convert their debts into dollar notes or loans denominated in yuan or US dollars, according to a filing
- The swap options offer creditors maturity extensions with different haircut levels or partial equitisation
Embattled Chinese developer CIFI Holdings put forward a revamped proposal to creditors as it aims to halve its US$7 billion in offshore debt amid a distressed liquidity situation.
The preliminary proposal offers creditors five options to convert their debts into dollar notes or loans denominated in yuan or US dollars, according to a filing with the Hong Kong stock exchange on Wednesday.
The swap options offer the creditors maturity extensions with different haircut levels or partial equitisation to cater to their varying preferences and needs, the company said.
CIFI seeks to address its aggregate offshore indebtedness by “deleveraging the company’s consolidated balance sheet” to reduce its offshore debt to between US$3.3 billion and US$4 billion. The company also aims to design a sustainable amortisation schedule to provide a healthy capital structure, the filing said.
Therefore, the revamped plan, following an earlier proposal in March, also includes a debt-equity swap option for creditors to equitise the debts via an instrument with a seven-year final maturity, according to the developer.
