Sunac, a prominent Chinese property developer, has sought bankruptcy protection in the United States. This comes shortly after receiving approval from its creditors to restructure around $10 billion in debt.
Sunac has filed for Chapter 15 protection with the US Bankruptcy Court for the Southern District of New York. This comes after Evergrande's similar filing last month. Chapter 15 allows for cooperation between US courts and debtors in cross-border bankruptcy cases, which may aid Sunac in negotiating with overseas lenders as it addresses its debt.
In a filing with the Hong Kong stock exchange on Monday, Sunac announced that it had received approval from over 2,000 creditors to restructure approximately $9.9 billion in debt and interest payments owed to investors outside of China. According to CreditSights, Sunac was ranked as China's 10th largest property developer in terms of contracted sales in August. However, prior to its default in 2022, it held the position of the third largest developer. Sunac’s total liabilities reached a staggering 1 trillion yuan ($137.6 billion) by the end of last year, just as sales slumped 50% in 2022 compared to the previous year, according to its most recent annual report.
Chinese policymakers have implemented various measures to support the struggling real estate industry, such as easing requirements for home buyers. However, the effectiveness of these policies in revitalizing sales and the overall business remains a crucial concern. Despite recent efforts, Country Garden, once the largest homebuilder in China, still faces the risk of default.