Debt restructuring enters deep water area: restructuring real estate companies have started to optimize plans.

On June 29, CIFI HOLD GP (00884) released insider news announcement, announcing further optimization and adjustment of the overseas debt restructuring plan, aiming to reshape a truly sustainable capital structure; at the same time, strengthening focus on light asset business lines to enhance financial flexibility and support a more sustainable business model. Following the footsteps of Sunac, Aoyuan, and YuZhou, yet another distressed real estate developer, who actively sought to optimize their solution after their initial overseas restructuring, has entered the market's attention. According to institutional statistics, nearly 80 real estate developers have defaulted on their debts since 2021, and by the end of 2025, over 60 have announced progress in debt restructuring, with over 20 completing debt restructuring or reorganizations, resolving over 1.2 trillion yuan in debt. However, the completion of debt restructuring does not necessarily mean a fundamental improvement in the operational aspects of distressed enterprises. Data from the National Bureau of Statistics shows that from January to May 2026, national real estate development investment was 30.356 trillion yuan, a 16.2% year-on-year decrease; new home sales were 29.366 trillion yuan, a 13.5% decrease; the decline in sales area and investment amount in May further widened compared to April. The real estate market is still in a period of deep adjustment after a sharp downturn, making the previously optimistic restructuring plans face difficulties in implementation, and further optimization has become a topic that distressed real estate companies must face. The market continues its L-shaped adjustment, and overseas debt restructuring plans are difficult to implement. In 2025, the real estate market experienced a period of low consolidation after a deep adjustment. Despite the "517 New Policy" and subsequent market stabilization measures, the market as a whole remains at the bottom of an L-shaped trend. Data from CRIC shows that from January to May 2026, the total sales of the TOP100 real estate developers were about 1.1707 trillion yuan, a 17.1% year-on-year decrease. Meanwhile, market differentiation has further intensified, with leading central state-owned enterprises maintaining their lead, while most small and medium-sized real estate developers are facing significant operational pressures. Most of the distressed initial restructuring negotiations were concentrated between 2023 and 2024 when the market's judgment on the industry's recovery pace was overly optimistic, and debt arrangements were based on high expectations of future sales. With sales continuing to decline from 2025 to 2026, the original plans were severely disconnected from reality. In 2023, Sunac completed its first overseas restructuring, but due to continued market weakness, the original plan could not be smoothly implemented. In 2025, under pressure to liquidate, Sunac launched a second overseas restructuring plan, which included a more comprehensive "full debt-to-equity conversion" plan centered around MCB (mandatory convertible bonds), resulting in the "zeroing out" of about $9.6 billion in overseas debt. In fact, as Sunac completed its second restructuring, a number of other distressed real estate developers that had already completed their initial restructurings were reassessing their debt pressures and repayment capabilities. Aoyuan completed its first overseas restructuring in March 2024, involving $6.1 billion, reducing debt by about 50%, but less than a year after the restructuring was completed, due to continued low sales and unpaid interest at maturity, a second round of restructuring was initiated in April 2026; Yuzhou Group completed its first restructuring in August 2025, involving $6.68 billion, reducing debt by around 52%, less than a year after the restructuring took effect, it initiated the hiring of financial advisors to advance the second round of restructuring in May 2026. Zhongliang, Jiayuan, and Times China launched a "solicitation for consent" from creditors to adjust the terms of their initial restructuring plans to secure a certain grace period for debt repayment. Zhongliang completed its first overseas restructuring in March 2024 and initiated a solicitation for consent in June 2025, delaying the repayment plan by 2 years to 2029, with a significant reduction in the interest rate; Jiayuan completed its first restructuring in September 2025 and applied for a consent solicitation in December of the same year, delaying the payment of the tail-end costs of the restructuring by 6 months, and after several delays, it was finally approved in March 2026; Times China completed its first restructuring in November 2025 and applied for a consent solicitation in March 2026 due to the risk of a cross-default on loans outside the scope of the restructuring. After clearing overseas debts, Sunac's business operations are recovering positively. In December 2025, Sunac became the first major real estate developer to complete a second round of overseas debt restructuring, effectively "zeroing out" its overseas debt. The core goal of Sunac's second restructuring plan was to completely eliminate financial risks and reconstruct a sustainable capital base for operations. Its main feature is the use of MCB as the core consideration, supplemented by innovative instruments such as an equity stabilization plan, creating a "community of interest" among creditors, shareholders, and management, transforming confrontation into cooperation, and jointly betting on the restoration of the company's fundamentals. After the basic clearance of overseas debts, the transmission effects of debt restructuring on Sunac's operations gradually became apparent. In 2026, several projects made positive progress for Sunac, such as Chongqing Bay, Tianjin Meijiang One, and Wuhan Guanggu One, which were revitalized and sold well. The debt-to-activate cycle, which promotes sales, was validated in Sunac's case. Sunac's success proved that when market recovery is below expectations, mere debt extensions are no longer effective. Restructuring plans with substantial debt reduction, especially debt-to-equity conversions, can fundamentally restore the company's balance sheet, completely eliminate overseas debt risks, and also send a positive signal to the market, homebuyers, financial institutions, and partners that the company is "completely overcoming difficulties and moving towards a new beginning." CIFI announced the optimization of the overseas debt restructuring plan, focusing on light asset transformation. Similarly, recently, CIFI announced the initiation of an optimization program for overseas restructuring. Looking back on CIFI's restructuring process, from announcing the start of overseas debt restructuring in November 2022 to the formal implementation of the restructuring plan in December 2025, it took more than three years. During this time, the industry has experienced a deep adjustment, and CIFI has been trying to save itself by delivering nearly 300,000 new homes in 76 cities across the country, with a delivery rate of 99%. Against the background of frequent delivery crises, CIFI has upheld its social responsibility and completed the task of delivering homes under extreme pressure. However, completing the delivery task does not mean a fundamental improvement in the operation, and the company's return to normal operations is still difficult. From the sales perspective, CIFI's sales decreased from 124.03 billion yuan in 2022 to 70 billion yuan in 2023, 33.68 billion yuan in 2024, around 16.1 billion yuan in 2025, and further shrank to 3.93 billion yuan from January to May 2026, with continuous sales decline and no new supply. The company's ability to cover rigid expenditures with operating cash receipts continues to weaken. In terms of asset disposal, since the end of last year, CIFI has announced multiple transactions: selling 100% equity of the Tianjin project to a Ping An subsidiary, simultaneously acquiring a 50% stake in the Ningbo project, offsetting the costs of the two transactions; selling a 50% stake in Luoyang Zhuofa and shareholder loans to avoid future development costs; transferring the No. 1 plot of the Shenyang Bochen Times project to a municipal-state-owned enterprise, with a consideration of 350 million yuan including tax, using 205 million yuan to repay project mortgages, and the remaining 145 million yuan to be invested in project operations and repayment of general creditors. Looking at the revitalization of existing projects, CIFI is constrained by risks passed on by partners, limited resources that can be mobilized, and the priority to repay project-level debts with sales proceeds, contributing very limited improvements to cash flow at the listed company level. It is under these circumstances that CIFI announced the optimization of its overseas debt restructuring plan, planning to push the company to completely get rid of continuous debt negotiations and payment pressure through a more pragmatic restructuring plan, reshape a truly sustainable capital structure, and truly "stand up". Focusing on light asset transformation signifies that CIFI will integrate various business lines with the overall coordination of the listed company, build a more sustainable business model, enhance the overall value of the company, and achieve a win-win situation with creditors.