Houlihan Lokey Advises Country Garden
Country Garden Holdings Company Limited has successfully completed the restructuring of its USD 17.7bn offshore indebtedness
Company Advisor
Houlihan Lokey is pleased to announce the successful restructuring of Country Garden Holdings Company Ltd.’s (Country Garden) c. $17.7 billion offshore indebtedness, which is one of the largest and most complex restructuring transactions by debt size and creditor mix in the Chinese real estate sector to date. The transaction helps the company to right-size its capital structure and has received overwhelming support from its bank and public bond investors. Houlihan Lokey acted as the financial advisor to Country Garden, leading the negotiation and implementation of the transaction.
Country Garden (SEHK:2007) is headquartered in Foshan and is one of the largest real estate developers in China. As of June 30, 2025, Country Garden held 3,077 real estate projects.
Since the second half of 2021, the Chinese real estate market has experienced a prolonged downturn, and developers have faced difficulties accessing funding. These challenges strained Country Garden’s liquidity and ability to service debt, leading to the company defaulting on its offshore indebtedness and pursuing a holistic restructuring in October 2023.
An ad hoc group of noteholders (AHG) representing c. 30% of public bonds and a coordination committee of bank lenders (CoCom) representing c. 50% of the syndicated loans were formed. The AHG and CoCom had different priorities and requests, and the company struggled to reach an agreement with either group for a period. In addition, the company faced immense pressure from a winding-up petition and various stakeholders, which impeded progress. Houlihan Lokey was mandated as Country Garden’s financial advisor to assist the company in leading negotiations with creditors and implementing the restructuring plan.
Houlihan Lokey assisted the company in finding a breakthrough with the two creditor groups. Following rounds of negotiation, the principal terms of the restructuring were agreed with the AHG, and the transaction was launched to the market in April 2025. Subsequently, an agreement was reached with the CoCom in August 2025.
The transaction helped the company achieve a deleveraging of c. $12 billion and a weighted-average maturity of its take-back debt of c. nine years. The transaction was implemented via a Hong Kong SAR scheme of arrangement (Scheme), and creditors were split into two classes, with Class 1 covering three tranches of syndicated loans and Class 2 covering 17 tranches of public bonds, 12 tranches of offshore guarantees of onshore bilateral loans, and two tranches of bilateral debt.
Under the Scheme, creditors could elect from five different options of take-back restructuring considerations according to their preference on exposure to cash, debt, or equity.
The transaction included an innovative structure in which secured lenders received a combination of cash and a debt instrument in exchange for releasing their collateral for the benefit of all creditors, which is the first of its kind in an offshore restructuring of a Chinese property developer.
The controlling shareholder shall convert its shareholder loans into (1) shares of Country Garden, allowing the controlling shareholder to retain its status as the largest shareholder of the company, and (2) acquire shares of a subsidiary holding the Forest City project in Malaysia, such that Country Garden can prioritize its cash flows to service offshore debt. A contingent value right shall be provided to scheme creditors to share in the upside from a future sale of the project by the controlling shareholder.
A management incentive plan was also put in place to motivate key management and employees and better align management and creditor interests.
Creditors favorably received the restructuring plan. Class 1 creditors represented 83.7% in value and Class 2 creditors represented 96.0% in value of the voting scheme claims voted in favor of the Scheme. The Hong Kong SAR court sanctioned the Scheme on December 4, 2025, and the restructuring became effective on December 30, 2025. This transaction was closed within four weeks after obtaining the court sanction order and demonstrated Houlihan Lokey’s ability to execute restructuring transactions at high efficiency.
The transaction marks one of the largest restructurings in the Chinese real estate sector to date. The holistic transaction not only showcased Houlihan Lokey’s unparalleled expertise in advising companies in large-scale complex debt restructurings but also further reinforced Houlihan Lokey’s leading position in debtor-side advisory mandates in the Asia-Pacific region.