Latham Advises on Sunac’s US$9.6 Billion Offshore Debt Restructuring

Latham & Watkins advised an ad hoc group of bondholders in the second round offshore debt restructuring of Sunac China Holdings Limited (1918.HK), a major Hong Kong-listed PRC property developer. The restructuring is implemented via a Hong Kong scheme of arrangement, which was sanctioned by the Hong Kong Court on 5 November 2025.

Pursuant to the scheme, Sunac will, on the restructuring effective date, exchange all of its scheme debts (totaling US$9.6 billion) into two types of mandatory convertible bonds (MCBs), one with a 6 month tenor and the other with a 30 month tenor, to be issued to scheme creditors. Both types of MCBs will be mandatorily converted into the company’s listed shares at maturity (or earlier, at the election of the bondholders). This represents the first 100 percent “debt-for-equity swap” implemented by a PRC property developer since the start of the Chinese property sector crisis in 2021, and which has overwhelming support from scheme creditors (with close to 95 percent in value of scheme debts voting in favour of the scheme).

The Latham team was led by Hong Kong restructuring partner Howard Lam, with counsel Flora Innes and associate Shirley Zhang. Advice was also provided on structured finance matters by Hong Kong partner Michael Hardy.