Sunac Real Estate Group: Subsidiary defaults on a new debt of 123 million yuan

On March 26, Sunac Real Estate Group Co., Ltd. released a temporary trustee management report on the company’s bonds.

According to the announcement, the company’s subsidiary Ezhou Ronghui Zhiyuan Real Estate Co., Ltd. failed to repay a principal amount of 123 million yuan of interest-bearing debt on time, with a default amount of 123 million yuan, and was notified of the default on March 19, 2026.

The term of this debt is 3 years, and the reason for default is the failure to repay the principal on time. In addition, the company and its key subsidiaries have recently added 20 instances of dishonest behavior, with a typical case being Sunac Real Estate Group being listed as a dishonest person by the Baota District People’s Court of Yan’an City, stating “capable of performance but refusing to fulfill the obligations determined by effective legal documents.”

The company currently has multiple bonds in existence, including H Sunac 05 (with a remaining amount of 215 million yuan), H Sunac 07 (with a remaining amount of 108 million yuan), and two debt restructuring replacement bonds, CZ Sunac 05 and CZ Sunac 07, with a total replacement scale of approximately 1.676 billion yuan, all with a coupon rate of 1%, and the obligation to pay interest has been waived.

Sunac Real Estate stated that the aforementioned matters have an adverse impact on the company’s production and operation as well as its debt repayment capability, and they are negotiating with relevant parties to develop a solution. The trustee manager Guotai Junan will continue to supervise information disclosure and remind investors to pay attention to risks.

Previously, Sunac Group had just disclosed a settlement regarding a financial loan contract dispute.

The plaintiff is Harbin Bank Co., Ltd. Dazhi Branch, and the defendants include Harbin Wanda City Investment Co., Ltd., Sunac Real Estate Group Co., Ltd., and Tianjin Sunac Xihui Cultural Tourism Real Estate Co., Ltd.

The case involves a financial loan contract dispute, and during the trial process, the parties reached a self-negotiated settlement. The Intermediate People’s Court of Harbin City, Heilongjiang Province, has issued Civil Mediation Document No. (2025) Hei 01 Min Chu 682.

The main content of the settlement agreement includes: both parties re-establishing the repayment plan for the principal and loan interest; Sunac Real Estate and Sunac Xihui assuming joint and several liability for the debt; the plaintiff waiving other litigation requests after the defendants repay the amounts in full and on time; if any installment defaults, the plaintiff has the right to demand a one-time repayment of the outstanding principal and interest; if repayment is not made on time, the plaintiff can prioritize claims against the mortgaged real estate and pledged rental income rights of Harbin Wanda.

Sunac Real Estate stated that the company reached the above settlement plan through communication and negotiation with relevant institutions and creditors. For other unresolved lawsuits, they will continue to maintain communication, strive to develop and implement solutions, and consider seeking an overall resolution.

Previously, Sunac China (01918.HK) issued a profit warning announcement, expecting the loss attributable to shareholders for the fiscal year 2025 to be between 12 billion and 13 billion yuan.

Sunac China stated that the significant reduction in losses is mainly due to the recording of gains from overseas debt restructuring this year. Excluding the impact of the debt restructuring gains, the losses recorded this year are mainly due to market influences, a significant decline in revenue recognition, and pressure on gross profit margins, as well as further provisions for asset impairment and contingent liabilities.