(Yicai) Dec. 5 -- Country Garden Holdings, once China's biggest builder, has won approval for its onshore and offshore debt restructuring plans, an overhaul that should lighten its debt load by over CNY90 billion (USD12.7 billion). The firm is also reshuffling its top management.

Creditors have agreed to extend repayment of nine domestic bonds worth CNY13.8 billion (USD2 billion), the Foshan-based company announced late yesterday. The High Court of Hong Kong has also approved extending USD17.7 billion of its offshore debt, people familiar with the matter told Yicai.

The lifeline is likely to restore confidence among homebuyers, supply chain partners, and financial institutions, helping Country Garden to quickly restore normal operations, said Liu Shui, director of enterprise research at real estate think tank China Index Academy.

The debt restructuring is expected to pare Country Garden’s liabilities by more than CNY90 billion, easing the firm’s debt repayment pressure over the next five years, according to industry insiders.

In addition, most of the new debt instruments will carry interest rates of between just 1 percent and 2.5 percent, saving Country Garden vast amounts in interest payments and effectively alleviate cash flow pressure, the insiders noted.

“The core of these plans is debt reduction, not simply extending repayment periods, while significantly lowering interest rates,” Liu noted. 

Country Garden's controlling shareholder has fully converted over USD1.1 billion of shareholder loans into equity and signed an irrevocable commitment, which shows its determination to help the company weather its difficulties, Liu noted.

"Aligning interests is crucial,” Liu stressed. “When the controlling shareholder takes the lead in bearing losses, it greatly enhances creditors' confidence, serving as a shot in the arm for the plan's final approval.”

In another announcement yesterday, Country Garden said that President Mo Bin was promoted to co-chairman responsible for coordinating outside strategic ties and resource integration, as well as overseeing the implementation of strategies and coordinating major cross-disciplinary issues.

Yang Huiyan remains in place as the other co-chair, with responsibility for leading the board and managing the company’s operations, it said.

Cheng Guangyu was promoted to president from executive vice president and chief executive officer of Country Garden Real Estate Group. He will build and implement the firm's operational management system, while overseeing day-to-fay operations and administration.

Cheng, who turns 45 this year, earned a PhD in civil engineering from Tsinghua University in 2007. He has held several mid-to-senior management positions at Country Garden and was appointed CEO of Country Garden Real Estate in May 2023, responsible for managing the parent company's development business.

In addition, Country Garden has also undergone a new round of organizational restructuring, merging its 13 property management regions into 10, the firm said.

Editors: Tang Shihua, Martin Kadiev