Shimao seeks offshore investor approval to restructure US$11.7 billion debt
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Embattled Chinese developer Shimao Group Holdings is seeking to restructure offshore debt worth US$11.7 billion. The company has presented four options to its creditors, including repayment through short-term notes, long-term notes, zero-coupon mandatory convertible bonds, and a combination of different securities. The aggregate principal amount offered through short-term notes or loans due in six years will not exceed US$3 billion, while the amount allocated to long-term notes or loans due in seven to nine years will not exceed US$4 billion. Shimao has been trying to resolve its debt issues since announcing an initial restructuring plan in December. The latest proposal aims to improve the company's capital structure and enable better management of operations. Failure to reach an agreement with creditors could increase risks for Shimao. Hui Wing Mau, Shimao's controlling shareholder, will be repaid with US$600 million of 2% 9.5-year bonds plus mandatory convertible bonds. Moody's Analytics predicts that the Chinese property market will take longer to recover, with real estate investment, prices, and sales expected to fall through 2024 before returning to modest growth in 2025.