Country Garden proposes major debt overhaul with new bonds and share issues

Country Garden Holdings is pursuing a significant restructuring, aiming to reduce over $11bn in debt. This involves issuing Mandatory Convertible Bonds (MCBs) – MCB (A) up to $7,514,770,000, MCB (B) up to $5,442,583,547, and MCB (C) for $39,461,396 – to creditors. These are convertible into shares at HK$2.60, HK$10.00, and HK$1.10 per share, respectively. The plan also includes issuing SCA Warrants at HK$0.60 per share, allowing Class 1 Creditors to subscribe for up to 1,157,000,000 new shares.

Furthermore, the company proposes issuing up to 914,221,768 new shares for work fees and RSA Fees, with an additional 42,210,000 shares possible if regulatory approvals for MCB (A) issuance for these fees are not secured. A key component is the capitalisation of Shareholder Loans, amounting to approximately $1.148bn, by issuing new shares to the controlling shareholder, Concrete Win, at HK$0.60 per share. These initiatives are designed to improve the company's capital structure and reduce its debt servicing obligations.

The restructuring also entails a connected transaction involving the disposal of equity interest in certain subsidiaries, with Concrete Win paying a fixed consideration of $50,000,000 by setting off Shareholder Loans. This transaction, alongside a proposed Management Incentive Plan, aims to realign stakeholder interests and preserve asset value. All proposed transactions are subject to shareholder approval at the EGM and regulatory consents.