SUNAC(01918): Domestic debt restructuring

SUNAC (01918) announcement: In view of the current overall operating situation of Sunac Real Estate, Sunac Real Estate plans to initially provide a comprehensive debt restructuring plan for bondholders, including four options of cash tender offer, stock and/or stock economic rights redemption, debt-to-equity swap, and full-term extension, as follows: (1) Cash tender offer plan: Sunac Real Estate plans to use cash to initiate a cash tender offer to repurchase at a price of 18% of the face value of each bond, with a total cash amount not exceeding RMB 800 million. The maximum amount of bond principal accepted under this plan is approximately RMB 4.4 billion, with cash payment expected to be made no later than 20 trading days after the bondholders' meeting approves and completes the corresponding registration. (2) Stock and/or stock economic rights redemption plan: Subject to the rules of the Hong Kong Stock Exchange, SUNAC will issue a specific number of shares to a special purpose trust (approximately 13.5 shares of SUNAC stock for every RMB 100 bond held by a bondholder, with an estimated total issuance of 400 million new shares) and commit to pay the corresponding net proceeds in renminbi (after deducting relevant intermediary fees) to bondholders who choose this plan upon the realization of the shares (completion within 12 months). This plan is expected to accept a bond principal of approximately RMB 3 billion. (3) Debt-to-equity swap plan: Sunac Real Estate plans to entrust the specific asset income rights held by its indirectly held subsidiaries to a trust company to establish a service-type trust, and will exchange the service trust units held with the bondholders who choose this plan at a discount (RMB 35 per trust unit for every RMB 100 bond). After acquiring the service trust units, bondholders will indirectly hold specific asset income rights of Sunac Real Estate's subsidiaries, with the service trust expected to last for 4 years. This plan is expected to accept a maximum bond principal of approximately RMB 4.1 billion. (4) Full-term extension plan: If this domestic debt restructuring progresses smoothly, Sunac Real Estate will pay approximately 1% of the principal in cash to bondholders who choose the full-term extension plan after the above options are completed; the remaining principal will be extended until June 9, 2034. The principal portion of the bonds choosing this plan will be paid in cash every six months starting from December 9, 2029, with the interest portion (including any previously accrued but unpaid interest, penalties, and future interest during the extension period, if applicable) being reduced to around 1%, with interest accrued until the final principal payment date being paid in cash, using simple interest calculation, without compound interest.