(Yicai) Jan. 10 -- Country Garden Holdings, formerly China's largest property developer, has proposed a plan to restructure its overseas debt, aiming to reduce its liabilities by as much as USD11.6 billion.

Country Garden has reached a consensus with a creditor group comprising seven banks, it said yesterday. They hold 48 percent of the firm's outstanding syndicated loans, totaling USD3.6 billion. But the parties have not yet entered into a legally binding deal as negotiations are still ongoing. 

The Foshan-based homebuilder defaulted on USD11 billion of offshore bonds in late 2023. As of Dec. 31 that year, the firm had total overseas interest-bearing liabilities of USD16.4 billion. 

Under the proposal, Country Garden's debt maturity could be extended to a maximum of 11.5 years, while the weighted average borrowing cost could be reduced to about 2 percent annually from around 6 percent.

Additionally, Country Garden's controlling shareholder is considering converting a USD1.1 billion loan into shares.

Among the seven lenders, the Bank of China Hong Kong and China Construction Bank Asia have confirmed that the current framework serves as a basis for further talks and have committed to continuing to work with Country Garden. 

The company has received positive feedback from many creditors, who are willing to offer long-term support to help the builder overcome its current challenges and complete the restructuring as soon as possible, according to an informed source. “Country Garden's proposal is very pragmatic, and many creditors have already expressed interest," the person said.

As of Dec. 31, Country Garden controlled more than 3,000 development projects, including 29 offshore. The total saleable contract area ranges between 90  million square meters and 92 million sqm, with around 1.3 million to 1.4 million parking spaces available for sale.

Last year, Country Garden delivered over 380,000 housing units to buyers, bringing its three-year total to about 1.7 million. Analysts note that the firm has passed its peak delivery period, with only about 200,000 pre-sold units yet to be handed over. Most are expected to be delivered this half.

Editor: Emmi Laine