Fantasia's Over $4 Billion Dollar Debt Restructuring Plan Approved, Debt Cycle Extended to 9 Years

Question AI · Among the three options in the restructuring plan, which is more favored by creditors?

After over four years of stalemate, Fantasia’s offshore restructuring process is about to come to an end.

On March 16, Fantasia (01777.HK) announced that its offshore debt restructuring plan has made significant progress. Both the Hong Kong Court and the Cayman Court issued approval orders on March 12, officially approving its Hong Kong and Cayman plans. This marks the substantive implementation phase of Fantasia’s debt restructuring.

An internal source from Fantasia stated that this signifies the company’s offshore restructuring plan has been upgraded from a “negotiated scheme” to a “legally binding document,” which is generally binding on Fantasia, all creditors, and related parties.

The internal source also mentioned that, on one hand, the two restructuring plans have received legal recognition and protection, and are legally binding on all creditors (including opponents), effectively preventing individual objections from delaying the process and increasing restructuring costs, ensuring the legality and fairness of the restructuring process; on the other hand, the approval of the plans also provides more reliable protection for creditors’ interests. Through multiple repayment options, the needs and risk preferences of different creditors are fully considered.

Fantasia’s offshore debt restructuring scheme offers creditors three options: “Short-term notes + Mandatory Convertible Bonds,” “Long-term notes + Mandatory Convertible Bonds,” and “Full conversion to common stock,” extending the debt maturities of approximately $4.018 billion to the end of 2034, with interest rates reduced to 3%.

Specifically, Option 1 exchanges each $1 of debt for $0.25 in short-term notes plus $0.20 in mandatory convertible bonds, with a 55% debt discount; Option 2 exchanges each $1 of debt for $0.60 in long-term notes plus approximately 0.099 new shares (based on an issuance price of HKD 1.52 per share), with a 25% discount; Option 3 converts each $1 of debt entirely into approximately 0.51 new shares, with no discount.

As one of the earlier distressed property developers, Fantasia announced in October 2021 that it could not repay a note of $206 million, thus initiating its debt restructuring journey. In early 2023, Fantasia disclosed its first offshore restructuring plan, and at the end of April 2024, it updated the restructuring terms. During this period, Fantasia’s controlling shareholder, Mr. Zou Baobao, also proposed injecting or facilitating a $6 million investment into Fantasia to fund restructuring costs and expenses.

In August 2025, Fantasia further revised the plan, lowering the interest rate on new loans or notes to 3% and extending the maximum term of the notes to nine years. Subsequently, Fantasia accelerated its offshore debt restructuring efforts. In early October of that year, creditors holding about 84.54% of Fantasia’s existing notes and approximately 77.33% of total outstanding debt instruments officially signed or effectively joined the restructuring support agreement.

In late February 2026, the creditor meeting approved the restructuring plan with a high vote of about 99.67% of the attending creditors; on March 12, the court approved the plan, and its effective date was subsequently confirmed.

An internal source from Fantasia stated that once the plan takes effect, it becomes a legally binding document on all creditors. The next phase involves further refining the subsequent procedures to complete the restructuring transaction, including but not limited to shareholder approval of relevant resolutions, regulatory approvals for stock and new notes issuance, etc.

(This article is from First Financial)