International

Another big Chinese developer files for US bankruptcy protection

September 19, 2023

Hong Kong, Sep 19 (AGENCY):

One of China’s leading property developers, Sunac, has filed for bankruptcy protection in the United States, shortly after winning approval from its creditors to restructure nearly $10 billion worth of debt.

The company has filed a petition for Chapter 15 protection with the US bankruptcy court for the Southern District of New York on Tuesday.

It’s the second big distressed Chinese developer in weeks to seek such protection. Earlier, Evergrande had made a Chapter 15 filing in the United States a month ago, after posting losses of $81 billion in the last two years, the report said.

The process allows the court to step in when an insolvency case involves another country, and it is intended to help promote cooperation between US courts, debtors and other jurisdictions involved in cross-border bankruptcy proceedings.

Entering the process may help Sunac China negotiate with overseas lenders as it works to overhaul its debt.

On Monday, the company said in a Hong Kong stock exchange filing that it had won approval from more than 2,000 creditors to restructure some $9.9 billion in debt and interest payments owed to investors outside China.

Sunac was China’s 10th largest property developer in August by contracted sales, according to CreditSights. But before it defaulted in 2022, it was the third largest.

Its success in securing a deal with overseas creditors could provide a roadmap for other distressed developers to get back on their feet.

 

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