Sunac, Country Garden debt deals bring respite for China's property sector
By Xie Yu, Donny Kwok and Steven Bian
HONG KONG (Reuters) -Chinese developers Sunac and Country Garden brought some relief to the crisis-hit property sector by forging debt deals with creditors, but the outlook remained clouded by uncertainty about a recovery in home sales.
Shares in Sunac China Holdings surged as much as 14% early on Tuesday after creditors approved its $9 billion offshore debt restructuring plan, the first green light of such a debt overhaul by a major Chinese developer.
The stock, however, gave up all its gains to close down 4.3% after reports, citing court documents, showed Sunac had filed for U.S. bankruptcy protection under Chapter 15.
Under the U.S. bankruptcy code, the move shields non-U.S. companies which are undergoing restructurings from creditors that hope to sue them or tie up assets in the United States. The step is seen as procedural in large offshore debt restructuring processes.
China Evergrande (HK:3333) Group, which is seeking to restructure a total of $31.7 billion in one of the largest such exercises in the world, also sought protection under Chapter 15 last month.
TROUBLED SECTOR
Separately, cash-starved Country Garden won approval from creditors to extend repayment on another onshore bond, the last of eight bonds it has been seeking extensions for, two sources familiar with the matter said on Tuesday.
The developments come as Beijing steps up efforts to revive the property sector, which accounts for roughly a quarter of the world's second-largest economy, with a raft of support measures unveiled over the last few weeks.
Two of its offshore bondholders, however, said they hadn't received $15 million coupon payments due Monday as of Tuesday morning in Asia, adding to concerns about
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