(Bloomberg) -- Sunac China Holdings Ltd. sought Chapter 15 bankruptcy protection in New York as the defaulted developer moved to protect assets while its offshore debt restructuring nears conclusion.
Such international efforts sometimes require a Chapter 15 petition in the course of finalizing a restructuring. Sunac’s application is for obtaining U.S. court approval to validate Monday’s creditor vote that backed the builder’s plan, the company said in a separate written statement.
Peer China Evergrande Group, which is also working to restructuring its offshore debt, last month made its own Chapter 15 filing. Evergrande, whose 2021 default accelerated the country’s property debt crisis, called the move “normal procedure” since its dollar bonds are governed by New York law. Some Sunac bonds are as well.
China’s 16th-largest developer by contracted sales, Sunac first defaulted on a dollar bond in May 2022 as the sector has undergone a sales slump and cash crunch over the past several years amid government-led efforts to curtail real estate leverage growth.
The company unveiled its offshore-debt restructuring plan in March, and within several weeks investors holding more than 75% of those borrowings accepted the proposal. Sunac on Monday said that those with 98% of the value of claims at a so-called scheme meeting voted in favor of the restructuring offer. A sanction hearing to have a Hong Kong court affirm the results has been scheduled for Oct. 5.
The builder’s Hong Kong-listed shares have soared 187% this month, by far the best performer in the Hang Seng Composite Index. But Sunac was down 3.6% in Tuesday’s trading as of 2:42 p.m., turning lower during the afternoon following the Chapter 15 filing.
(Updates with company statement in the second paragraph and stock performance in the sixth.)
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