Core Viewpoint - Baolong Real Estate is struggling with debt default and has made progress in its offshore debt restructuring by signing a support agreement with a creditor group holding approximately 31% of the planned debt [1][2]. Group 1: Restructuring Progress - On October 13, Baolong Real Estate announced a restructuring support agreement with a creditor group holding about 31% of the planned debt [2]. - The restructuring plan includes a "package" repayment scheme involving cash, equity, and bonds, with the pledge or transfer of shares in Baolong Commercial as a key asset [1][4]. - The restructuring will proceed under the "scheme of arrangement" mechanism according to Hong Kong Company Ordinance, requiring over 75% creditor approval and court sanction [4]. Group 2: Debt Repayment Options - The restructuring proposal offers creditors multiple options, including a cash payment of 12% of their claim amount, shares in Baolong Commercial at a conversion price of HKD 15 per share, and new medium to long-term notes [4][5]. - The cash payment will be funded by USD 40 million raised from pledging or selling Baolong Commercial shares, with proportional distribution in case of oversubscription [4]. - A cash consent fee mechanism is also in place, rewarding creditors who support the restructuring with 0.15% of the principal amount of eligible debt [6]. Group 3: Financial Status and Challenges - Baolong Real Estate's financial situation is precarious, with total revenue of approximately CNY 13.251 billion in the first half of the year, a year-on-year decline of 15.3%, and a loss attributable to shareholders of about CNY 2.652 billion [11]. - As of June 30, 2025, the company had total borrowings of approximately CNY 56.111 billion, with CNY 27.598 billion classified as current liabilities, and a net debt ratio of 104.1% [11]. - Baolong Commercial, a key asset in the restructuring, has a stable financial position with cash and bank balances of approximately CNY 4.285 billion and no interest-bearing debt [9]. Group 4: Historical Context and Future Outlook - The restructuring journey has been tumultuous, with previous plans failing due to unmet conditions, leading to a renewed effort to address overall debt issues [10][16]. - The restructuring plan is expected to be completed by September 30, 2026, pending regulatory approvals and court recognition [7]. - The outcome of the restructuring will depend on securing support from over 75% of creditors and the resolution of ongoing liquidation hearings related to Baolong Viking, a subsidiary holding 63% of Baolong Commercial [12][14][16].
宝龙地产再启境外债务重组 押注宝龙商业股权求生