Nation Backyard expects to achieve phrases with collectors in February, lawyer tells court docket

By Clare Jim

HONG KONG (Reuters) -China’s Nation Backyard (HK:2007) expects to achieve phrases with collectors subsequent month relating to the restructuring of $16.4 billion in offshore debt, and apply for court docket approval of the phrases in April, its lawyer advised a Hong Kong court docket on Monday.

The property developer was granted an adjournment till Could 26 in a listening to held to gauge the extent to which restructuring is continuing forward of a choice on a liquidation petition.

“Adjournment at the moment is to permit the corporate to proceed to make progress on the restructuring,” Hong Kong justice Linda Chan mentioned.

Nation Backyard was as soon as China’s greatest developer by gross sales. It defaulted on $11 billion in offshore bonds in late 2023, deepening a debt disaster in a sector that had seen defaults by main friends together with China Evergrande (HK:3333) Group.

Evergrande was ordered by the Hong Kong Excessive Courtroom to liquidate in January final yr after the developer was unable to suggest a debt restructuring plan acceptable to collectors.

Averting liquidation would enable Nation Backyard to return its focus to a property sector blemished by unfinished properties and shattered purchaser sentiment, and the place policymakers have struggled to show the tide with a wave of stimulus measures since 2022.

Nation Backyard mentioned this month it has proposed restructuring that might reduce offshore debt by 70% and that it had reached an “understanding” with a lender group.

Its lawyer requested on Monday time to resolve three “sticky factors” in negotiation with two main teams of collectors – a bunch of bondholders with 30% of excellent U.S. greenback senior notes and a bunch of lenders comprised of seven banks.

The problems relate to the lender group releasing its safety package deal in trade for compensation, the conversion value of convertible bonds and the phrases of latest notes.

Chan mentioned Nation Backyard ought to disclose whether or not it expects to achieve an settlement with collectors by February-end. If it doesn’t, events together with the petitioner and collectors can apply to deliver the subsequent listening to ahead.

Ever Credit score, a unit of Hong Kong-listed Kingboard , filed a petition in opposition to Nation Backyard in February for not repaying a $205 million mortgage.