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against the backdrop of no fundamental improvement in the fundamentals of the real estate industry, some real estate companies are still facing debt pressure and have to extend their debts again.

market news recently said that sunac china and longfor group are communicating with creditors and plan to propose a debt restructuring plan in the coming months, which may involve domestic bonds and loans.

in this regard, people familiar with the matter and people close to longfor told reporters that the above news is true. it currently only involves the re-restructuring of domestic debts and does not involve overseas debts. sunac expects to use the existing plan to cover the previous domestic debt restructuring plan.

"this means that the domestic debts of sunac and longfor need to be extended again, and if they want to complete the new domestic debt restructuring plan, they may have to pay a higher price than before," said a real estate industry analyst.

in fact, sunac completed its first domestic debt restructuring last year.

on january 3, 2023, sunac china holdings limited issued an announcement stating that the overall extension plan for domestic bonds totaling rmb 16 billion was voted through by the bondholders' meeting, involving a total of 10 outstanding corporate bonds and supply chain abs, with a weighted average extension period of 3.51 years.

in terms of overseas debt, in november 2023, sunac completed a debt restructuring of us$9 billion through the method of "debt-to-equity conversion + issuance of new bills", and the total debt reduced through debt-to-equity conversion exceeded us$4.5 billion.

with the completion of all debt restructuring in the domestic and overseas public markets, sunac became the first large real estate company to complete all processes of domestic and overseas debt restructuring, and overall resolved debt risks of approximately rmb 90 billion. there is no rigid debt repayment pressure in the overseas public market within 2-3 years.

however, as the real estate market continues to bottom out, like most real estate companies, sunac's sales performance has also been declining, causing cash flow to continue to be under pressure, and it still faces considerable debt pressure.

it is understood that in the first half of this year, sunac has successfully extended the maturity of 10 domestic bonds to the end of this year. among them, sunac adjusted the repayment plan of 4 bonds on may 9 this year, adjusting the principal and interest repayment in june and september in the original overall extension plan to december.

"sunac will continue to seek debt extension and overall resolution solutions in the second half of the year." sunac mentioned in its interim performance announcement this year that in the second half of 2024, the company will continue to actively communicate with creditors on current debt issues and potential debt pressures, and strive to maintain the stability of debt fundamentals while continuing to promote the reduction of existing financing costs as the focus of its next work.

sunac said that the company will continue to deepen the communication and cooperation with core financial institutions, seek flexible and diverse solutions to resolve debt risks and revitalize assets. it will also closely follow the new financing support policies in the industry, strive to support the company's debt risk resolution through new policies, and actively promote the delivery of buildings and asset revitalization.

prior to this, in order to ease liquidity pressure, sunac has cooperated with amc institutions since the end of 2022 to successfully revitalize core projects such as shanghai dongjiadu and wuhan taohuayuan. as of the first half of 2024, sunac's cooperation with major amcs amounted to nearly 30 billion yuan.

judging from sunac's performance in the first half of this year, its losses have narrowed significantly, but its revenue has also declined significantly.

sunac's 2024 interim performance report shows that in the first half of this year, sunac achieved operating income of 34.28 billion yuan, a year-on-year decrease of 41.4%; the gross loss was 1.81 billion yuan, a significant narrowing of 41.2% from the loss of 3.079 billion yuan in the same period last year; during the period, the loss attributable to the owners of the company was approximately 14.96 billion yuan, a year-on-year decrease of approximately 2.7%.

the financial report shows that as of the first half of this year, sunac's unsold land reserves were worth 1.23 trillion yuan, and 93% of the new saleable resources in the second half of 2024 were distributed in first- and second-tier cities.

in terms of debt, as of june 30, 2024, sunac's interest-bearing debt has dropped to 277.43 billion yuan. as of the end of august this year, sunac's outstanding loan principal was 114.32 billion yuan.

"whether sunac's domestic debt restructuring will be successful depends on whether it can obtain the consent of creditors. if the debt restructuring plan can be successfully implemented, it will improve sunac's asset-liability situation, ease its debt pressure, and create conditions for the recovery of its operations," the aforementioned analyst pointed out.