by HOU Ruining

The Hong Kong High Court on Jan 5 dismissed a winding-up petition against Sunac China Holdings Ltd (01918.HK), removing a major legal overhang tied to the case after the developer completed a sweeping offshore debt restructuring.

Sunac's shares jumped as much as 4.69% during the session and were up 3.13% at last check.

The petition had been filed in January 2025 by China Cinda (Hong Kong) Asset Management Co., and hearings were repeatedly adjourned until Monday's ruling. The dismissal means Sunac will not enter statutory liquidation or dissolution proceedings as a result of this petition.

The decision follows the completion of Sunac's comprehensive offshore debt restructuring. In an exchange filing on Dec 23, the company said all conditions had been satisfied and the restructuring had taken effect, resulting in the release and discharge of about US$9.6 billion in existing offshore liabilities. Under the plan, Sunac issued two tranches of mandatory convertible bonds to scheme creditors.

Sunac said the restructuring had substantially resolved its debt risks and delivered a more sustainable capital structure, which it expects will support the gradual recovery of its onshore development business and asset disposals.

Separately, a restructuring involving Chiyu—covering the group's last remaining obligation outside its comprehensive offshore debt restructuring—also took effect on Dec 23. Sunac expects to settle about HK$775 million of debt by issuing 279.2 million new shares, with part of the remaining balance converted into a long-dated loan.

Despite the balance-sheet reset, Sunac remains under operational pressure. In the first half of 2025, revenue fell 41.7% year on year to RMB 19.99 billion, while net loss attributable to shareholders widened to RMB 12.81 billion.

Its property services and cultural tourism units provided some support. Combined revenue from the two segments exceeded RMB 5.6 billion, accounting for 28.3% of total revenue. Sunac Services reported a return to profitability, with cash on hand of RMB 3.04 billion and contracted management area of 290 million square meters.

China's property sector remains under pressure, even as debt restructurings reduce near-term financial risks for some developers.