China Aoyuan Receives Hong Kong Court Approval for Offshore Debt Restructuring Plan

China Aoyuan has received court approval in Hong Kong for the Guangzhou-based developer’s offshore debt restructuring plan after securing sanction from judges in the Cayman Islands and the British Virgin Islands last month.

Aoyuan hailed the “major milestone” in a Friday filing with the Hong Kong stock exchange, with the win bringing the builder a step closer to implementation of a “holistic restructuring” of its $6 billion in dollar-denominated debt.

In a separate announcement on Thursday, the company said it had received approval at a Wednesday shareholder meeting to issue new shares and convertible bonds in support of the restructuring scheme. Aoyuan’s HKEX-listed shares rose 10.5 percent in Friday trading to close at HK$0.21 ($0.03).

“The company would like to express its deepest and sincerest gratitude to the support of all stakeholders and the professionalism and commitment of the advisory team, without which the company would not have been able to achieve this important milestone,” chairman Guo Zi Wen said in the filing.

Longfor, R&F Get Creative

In a fresh sign of Chinese developers’ long road to financial normalcy, two of Aoyuan’s mainland rivals — Longfor Group and Guangzhou R&F Properties — are finding creative ways to reward the patience of their shareholders and creditors.

Beijing-based Longfor notified shareholders on Friday that they could opt to receive their 2023 interim dividends in one of three ways: as cash at a rate of RMB 0.32 ($0.05) per share; as new shares credited as fully paid and having an aggregate market value equal to the total amount of cash dividends the shareholder would otherwise receive; or as an apportionment of both new shares and cash.

Longfor said its “scrip dividend scheme” would give shareholders an opportunity to increase their investment in the company at market value without incurring brokerage fees, stamp duty and related dealing costs.

R&F, meanwhile, told bondholders on Thursday that the interest due that day on 2025, 2027 and 2028 dollar-denominated notes would be “paid in kind” via a $206 million increase in the outstanding principal of the instruments.

Sino-Ocean’s Extension Scheme

In other China real estate news, Beijing-based Sino-Ocean Group reportedly has informed some bondholders that it plans to extend all of its outstanding onshore bonds.

The scheme would include pushing back by up to 30 months the maturities of four bonds totalling RMB 7 billion ($980 million), according to a Thursday Bloomberg story citing people involved in the private talks.

Finally, Jiayuan International this week announced the appointment of Deloitte to oversee the Nanjing-based developer’s liquidation after a Hong Kong court ordered the winding-up of the company last May.