(Yicai) Jan. 4 -- CIFI Holdings Group has released a preliminary proposal for a restructuring plan that would about halve the struggling Chinese real estate developer’s USD7 billion overseas debt.

Creditors can convert their debts into new bonds with terms of two to nine years and nominal interest rates of 2 percent to 4 percent to expand debt maturities and cut debt principals, the Shanghai-based developer said in a filing to the Hong Kong Stock Exchange yesterday. The plan would cut CIFI’s overseas debt to between USD3.3 billion and USD4 billion.

The new bonds, which will all have the same guaranteed portfolio to ensure credit enhancement, will be linked to future contract sales and have a deferral mechanism, CIFI noted, adding that the deferred interest rates will be paid to creditors in a lump sum or after the last installment.

CIFI [HKG: 0884] was trading down 3.5 percent at 28 Hong Kong cents (4 US cents) as of 10.05 a.m. in Hong Kong today, after closing 13.7 percent up yesterday. The stock plunged nearly 77 percent last year.

CIFI has CNY19.2 billion (USD2.7 billion) cash and CNY45.6 billion property investment, yesterday’s filing showed. The firm can earn CNY12 billion to CNY14 billion in liquidity by selling some properties and overseas assets, raising its cash flows that can be used to repay overseas debts to between CNY30 billion and CNY35 billion.

CIFI’s revenue rose 5.4 percent to CNY31.3 billion in the first half of last year from a year earlier. It turned CNY1.9 billion (USD267.3 million) net profit into CNY9.1 billion net loss in the period.

Last year, CIFI delivered 118,000 properties, a new record since it was established in 2000. The company expects to deliver 80,000 properties with a construction and installation cost of over CNY30 billion this year.

CIFI extended the maturities of four domestic debts worth a total of CNY7.2 billion last year, after starting overseas debt restructuring efforts in November 2022.

Editor: Futura Costaglione