*

Liquidation hearing adjourned to April 28

*

Houlihan Lokey ( HLI ), Sidley Austin appointed as restructuring

advisors

*

$30 million loan to be included in new restructuring

-lawyer

*

Some developers may now focus on onshore debt

restructuring

(Adds comments from Sunac in paragraphs 2-3)

By Clare Jim

HONG KONG, March 24 (Reuters) - China Sunac

has become the first Chinese property developer to plan a second

restructuring of its offshore debt.

The company said in a filing on Monday it would seek a more

comprehensive debt solution "to address its current offshore

debt risks", citing the impact of a liquidation petition against

the company, and weak market conditions.

It has appointed Houlihan Lokey ( HLI ) and Sidley Austin as its

financial and legal advisors, respectively, it said.

Earlier in the day, the lawyer of a unit of state-owned

asset manager Cinda told a Hong Kong court Sunac had informed it

about the restructuring intention.

Cinda (HK) filed a liquidation petition this year against

Sunac over the non-payment of a $30 million loan.

The petition surprised many in the market because Sunac

completed a $9 billion offshore debt restructuring in 2023, the

first developer in China's property sector to do so since the

debt crisis that began in 2021.

Once accounting for a quarter of China's GDP, the sector has

struggled to recover from a liquidity crisis triggered by a

regulatory crackdown on developer debt, leaving projects

unfinished and buyers wary.

A lawyer for Cinda, Thomas Wong of Temple Chambers,

sought an immediate liquidation of Sunac in Monday's hearing,

saying the developer had not provided any documents of a new

restructuring plan. The hearing was adjourned to April 28 to

allow Sunac to present its progress.

The company had informed some of its dollar creditors it

was unlikely to meet a September deadline for its first tranche

of restructured notes, Reuters reported in January.

Cinda's $30 million loan is expected to be included in the

second restructuring, Wong told Reuters outside the court. It

was not included in the first round. The company hasn't

disclosed when the loan was due.

Sunac declined to comment.

OFFSHORE BATTLE

Sunac had total borrowings, including onshore and offshore,

of 227.43 billion yuan ($38.23 billion) as of end-June. It had

total cash of 25.7 billion yuan.

It restructured $2.1 billion worth of onshore bonds late

last year and cut the debt by more than half. It still needs to

negotiate restructuring terms with creditors on other onshore

loans.

Cinda, which is also a major lender to Sunac in mainland

China, is using the Hong Kong petition to raise its bargaining

power for negotiations on both its onshore and offshore loans,

according to two people familiar with the situation. They

declined to be named due to the sensitivity of the issue.

Cinda did not immediately respond to a request for comment.

Weighed down by weak sales and a lack of new funding

channels in a prolonged property downturn, Chinese developers

have been instructed by authorities to focus on completing homes

for buyers and repaying onshore creditors, developers say.

Some are now rethinking their offshore repayments,

industry sources and advisers say. Depending on the company and

creditors, offshore and onshore debt can be dealt with quite

separately.

Some developers may want to forgo an offshore restructuring

now because "after spending so much time and money on it, the

company could still be wound up," said Foreky Wong, founding

partner of advisory firm Fortune Ark Restructuring.

"So perhaps it is better to focus their resources on just

onshore restructuring."

($1 = 7.2288 yuan)