CIFI's 10 billion company bond restructuring plan is released: the asset-to-debt settlement plan does not provide a bottom guarantee, and the debt retention plan is extended for 9.5 years

CIFI HOLD GP (00884.HK) has released its corporate bond restructuring plan.

On June 16, The Paper learned that from June 27 to June 30, an online creditor meeting will be held for 7 corporate bonds under CIFI HOLD GP to review the bond restructuring proposal.

The 7 corporate bonds are PR CIFI 01, H20 CIFI 2, PR CIFI 03, H21 CIFI 1, H21 CIFI 2, H21 CIFI 3, and H22 CIFI 1, with a total principal amount of approximately 10.6095 billion yuan. These are all the outstanding corporate bonds under CIFI HOLD GP.

The restructuring plan includes adjustments to credit enhancement measures and offers other options for the restructuring plan, including bond repurchase options, equity economic rights options of CIFI HOLD GP, debt-for-equity options, and general creditor options. If none of the above options are chosen by the bondholders, a full debt retention long-term extension plan will be implemented.

The proposal indicates that the meeting of bondholders must be attended by more than half of the bondholders holding the total amount of the outstanding bonds with voting rights in order to convene. Additionally, the meeting resolution must be agreed upon by more than half of the bondholders present holding the total amount of the outstanding bonds with voting rights to form an effective resolution.

According to the arrangements of the bond restructuring plan, each option will be opened for declaration registration in sequence and in phases: first, the declaration registration will be opened; after the bond repurchase option allocation is completed, the stock option will be opened; after the stock option allocation is completed, the debt-for-equity option will be opened; and after the debt-for-equity option allocation is completed, the general creditor option will be opened.

Bond repurchase option. The bond repurchase will be initiated within 3 months after the proposal is approved, and payment will be completed within 1 month after the repurchase results are announced. The total repurchase amount will not exceed 200 million yuan, at a discount repurchase price of 18% of the bond's face value, but bondholders must waive all accrued interest. The bonds will be canceled after repurchase, and non-participants can choose other restructuring options.

Stock option. Bondholders can also exchange their bonds for the equity economic rights of CIFI HOLD GP, but not directly receive stocks; instead, a trust company will hold them on their behalf. Every 100 yuan of bonds can be exchanged for 68 shares of stock, with the number of newly issued shares expected to not exceed 680 million shares. Bondholders can instruct to sell the stocks monthly within 30 months after the issuance is completed, and any unsold portion will be forcibly sold at market price starting from the 29th month.

Debt-for-equity option. The plan allows creditors to exchange their bonds for the economic rights of real estate projects under CIFI HOLD GP, involving partial equity in projects such as Beijing Guo Xiang Fu, Beijing Guo Xiang Yun Zhu, Guangzhou Guang Yu Nan Fang, and Shanghai Chang Shou Lu CIFI Li, with a total consideration scale not exceeding 6 billion yuan in bond face value. Every 100 yuan of bonds can be exchanged for 36 trust preferred shares, corresponding to the underlying project asset economic rights. Creditors choosing this option must waive all unpaid interest on the bonds.

The reporter noted that compared to the preliminary plan announced by CIFI HOLD GP on May 23, the number of trust shares that can be exchanged for every 100 yuan of bonds in the debt-for-equity option has increased from 35 to 36. Meanwhile, CIFI does not provide a guarantee for the trust shares in the debt-for-equity option: this trust plan has no fixed term, and the repayment amount and timing of the trust shares depend on the operation or disposal of the proposed debt-for-equity assets, and the issuer does not bear joint liability for the repayment of the trust shares Creditors can convert their held bonds into non-bond general claims against the issuer at a ratio of 1:1. The converted bond shares will be canceled, and there is no upper limit on the scale of this option. The final payment date is January 18, 2034, with an interest rate of 1% simple interest after the benchmark date. The plan provides multiple real estate project equity income rights, including the Shenyang Bochen Times project, as credit enhancement assets.

The full debt retention long extension plan extends for 9.5 years, with the interest rate reduced to 1%. The repayment period for the outstanding principal of the existing corporate bonds is adjusted to 9.5 years starting from July 18, 2025 (hereinafter referred to as the "benchmark date"), with the maturity date adjusted to January 18, 2035, and interest calculated at 1% simple interest from the benchmark date (inclusive).

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