Hong Kong-based Logan Group proposes restructuring its $8 billion offshore debt

(Reuters) – Hong Kong-based developer Logan Group said on Monday it was offering a restructuring proposal for the majority of its about $8.01 billion offshore debt, including conversion to mandatory convertible bonds for its offshore creditors.

Logan Group seeks to restructure $7.56 billion of the total offshore debt, while also aiming to relieve creditors of its additional $476 million offshore debt under separate financing instruments.

In August, the Chinese developer had secured an HK$8.2 billion ($1.05 billion) loan to refinance a part of this outstanding debt as it struggled to recover from the property sector collapse in 2021.

Under the restructuring proposal for the larger amount of the debt, offshore creditors have the option to exchange the debt for cash, mandatory convertible bonds (MCB), long-term notes or a combination of MCBs and short-term notes.

After failing to make repayments since August 2022, Logan Group said the restructuring proposal is aimed at relieving the company’s debt burden and restoring its capital structure.

($1 = 7.7785 Hong Kong dollars)