Linklaters advises Country Garden on approximately US$17.7bn offshore restructuring, setting a new benchmark for Chinese real estate deals

Linklaters has advised Country Garden on the successful restructuring of approximately US$17.7bn of its offshore debt, effective on 30 December 2025. This is one of the largest and most complex offshore restructurings by a Chinese issuer, in terms of the size of the total debt as well as the number and diversity of creditors.

Linklaters helped Country Garden achieve deleveraging, extended maturities and reduced funding costs, all of which are critical to recovery in an extremely difficult market environment, and were delivered within an exceptionally tight timeframe. The transaction sets a new benchmark for future restructurings in the Chinese real estate sector.

The deal involved a highly complex capital structure and diverse stakeholder dynamics. Appointed at a critical juncture in May 2024, Linklaters worked closely with Country Garden’s management team to formulate and implement a comprehensive restructuring strategy.

Linklaters applied legal expertise and commercial insight to develop practical solutions to resolve complex stakeholder dynamics and bridge gaps between creditor groups, ensuring swift resolution of issues and decisive action towards meeting the restructuring objectives, and completion within 2025.

Key contributions included:

• supporting the company’s engagement with the Stock Exchange and the timely resumption of trading in its shares, which was essential to creating the right market backdrop for the restructuring
• in relation to the winding up petition against the company, helping it obtain an initial six month adjournment and subsequent extensions, securing the time needed to negotiate and implement the restructuring
• designing and implementing an innovative structure to effectively adjust the ranking of creditors, including the release of collateral by a group of secured lenders for the benefit of all creditors – the first structure of its kind in an offshore restructuring by a Chinese property developer
• mapping and unwinding complex cross guarantees between the listed company and its onshore subsidiaries, materially reducing risk at the listed company level
• structuring and implementing a management incentive plan within the restructuring framework and obtaining broad creditor support, striking a balance between motivating management and protecting creditor interests
• at creditors’ request, helping to separate Forest City from the listed company and creating an executable solution despite valuation, shareholder approval and regulatory constraints.

The transaction was led by partner William Liu. The matter brought together specialists in restructuring, capital markets, corporate, banking, litigation, arbitration and investigations, financial regulatory and employment from across Linklaters’ global network to provide seamless, fully integrated cross border and cross-practice support.

Other core team members included partners Richard Woodworth, Denise Fung, Maggie Ng and Taiki Ki; senior consultant Mark Fairbairn; counsel Christian Felton, Su Ern Lee, Olivia Yiu and Queenie Tong; supported by Wendy Ding, Kenneth Kong, Dean Sofillas, Yin Shuopeng, Elio Cunico, Cheng Rui Chua, Tang Jun and James Leung.

Linklaters Senior Partner and Chair, Aedamar Comiskey, commented:

“We are very proud to have supported Country Garden on this landmark restructuring. It is an excellent example of how we work as one global team across borders and practices to bring the whole firm to our clients, enabling them to address their most complex strategic challenges.

This transaction sets a new benchmark for offshore restructurings in the Chinese real estate sector and underlines our long term commitment to clients in Asia. It showcases the strength of our global platform and culture of teamwork, our deep experience in restructurings and our ability to deliver innovative solutions under intense time pressure. We are grateful to Country Garden for their trust and to all of the advisers involved for the highly collaborative way in which they approached this matter.”

Linklaters partner William Liu commented:

“We are deeply grateful to Country Garden for its trust in Linklaters and honoured to have supported the company on this landmark restructuring.

The deal was exceptionally challenging in its scale, structure and timetable. The interests of different creditor groups, regulators and the company itself were complex and often competing, and many of the key decisions were difficult as well as critical to the company’s long term future.

We maintained open and pragmatic dialogue with management, bank creditors, bondholders and other stakeholders, and worked to develop solutions that respected the rights and commercial priorities of all parties while helping the company to do the hard but right things. We are pleased to have been part of the answer to some of the company’s toughest problems, and we are very grateful to all the professional teams involved for their support and collaboration throughout the process. Once again, we extend our warmest congratulations to Country Garden and everyone involved.”