Builder Jinke Property reveals details of court-supervised debt restructuring plan
Jinke expects to reduce its liabilities-to-assets ratio to around 30% from more than 90%
Chinese developer Jinke Property Group has revealed details of its court-supervised onshore debt restructuring programme to some of its creditors, people familiar with the matter said.
Under the plan, the Chongqing-based company would make cash payments of as much as 50,000 yuan ($6,851) to each bondholder, the people said. Those payments would come after it receives 1.8 billion yuan from a group of two local firms serving as a white knight for the restructuring, the people said, which is still subject to creditor and court approval.
The remainder of the debt would be repaid via a debt-to-equity swap and a trust product, the people said. Each bondholder would receive about 2.5 shares of Jinke and an expected 1.9 yuan in the trust for every 100 yuan of debt principal, the people said. Jinke shares were trading at 1.64 yuan Monday morning, according to Bloomberg data.
If the plan is successful, Jinke, which was once China’s 25th largest developer by contracted sales, could offer a restructuring road map for other companies struggling to repay debt. But if creditors do not give their backing, the company’s risk of liquidation could rise.
Under the plan, Jinke would set up an eight-year trust for debt payment backed by shares in 20 subsidiaries. The 20 subsidiaries manage more than 200 Jinke projects across the country, one of the people said.
There could also be a second round of repayment via shares and the trust, but details are unclear, the people said.
