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Admiralty Harbour is a credit-focused financial services firm based in Hong Kong.
Admiralty Harbour Completes Debt Restructuring for China Fortune Land
Feb 2023
On 31 January 2023, China Fortune Land Development Co., Ltd. (600340.SH) successfully completed its offshore US dollar bond restructuring by way of scheme of arrangement.  Admiralty Harbour acted as the company’s financial advisor on the transaction.

CFLD (CAYMAN) INVESTMENT LTD., a wholly-owned subsidiary of the company, had 11 tranches of outstanding US dollar bonds, with an aggregate outstanding principal of US$4.96 billion.  In February 2021, facing liquidity issues as a result of adverse operating and macroeconomic conditions, the company appointed Admiralty Harbour as its financial advisor to work with the company to implement an offshore restructuring consistent with the company's onshore restructuring plan and international practices and expectations.

The restructuring was structured to offer equivalent financial terms to offshore and onshore creditors.  In consideration of the company’s future strategic plans, the offshore bonds were extended. Before the extended maturity date, the company plans to repay 30% of the outstanding principal amount using the proceeds from asset sales and offsetting 16.7% of the outstanding amount with interests in onshore trust units.  The remaining 53.3% of the outstanding principal will be converted into equity interests in an onshore business portfolio or remain outstanding, at the discretion of the creditors.

The transaction was overwhelmingly supported by creditors globally.  At the scheme meeting held on 16 January 2023, creditors holding approximately US$4.7 billion (or 94.2% of the total outstanding) in the principal amount of offshore bonds participated. Creditors holding US$4.6 billion of bonds (representing 97.90% of the participating principal amount) voted in favor of the scheme.  On 23 January 2023, the High Court of English and Wales sanctioned the scheme of arrangement.

The transaction is the largest restructuring of offshore debt of a Chinese company by way of scheme of arrangement to date, and the first public debt restructuring for a Chinese company by way of a UK scheme of arrangement.  China Fortune Land is also the first Chinese property developer to successfully complete a debt-for-equity swap in its offshore restructuring.
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