Sunac Restructuring Plan a Better Deal Than Evergrande’s: Lucror

Published 30 March 2023, 11:46:18 UTC+8:00

(Bloomberg) -- Developer Sunac’s restructuring proposal offers better terms than China Evergrande’s recently announced plan, given the slightly shorter tenors, earlier cash interest payments and the presence of a consent fee in cash, according to a research note from Lucror Analytics.

* Sunac’s proposal offers a larger portion of notes to be potentially converted into equity than Evergrande’s plan, and “the debt to equity swaps are aimed at helping the company to deleverage, so that it can emerge from the restructuring with a healthier balance sheet,” analyst Leonard Law wrote in the Thursday note

** However, “it is highly uncertain if creditors can enjoy any upside from the equity, given the high conversion prices”

* Law said Sunac’s management “has shown greater sincerity than peers” and believes it’s at substantially lower risk of liquidation than Evergrande, and should be able to continue business operations going forward