- On 10 November, E-House announced it has reached an agreement with the major offshore creditor group (representing around 35.6% of aggregate principal amount of the offshore debts), and hereby published the second round of restructuring plan and asked other bondholders to participate in the restructuring support agreement. (The following information is for reference only and the details are subject to the original announcement.)
- This scheme is applicable to all existing E-House’s USD bonds and requires 75% creditors’ approval to pass. As it is not an exchange offer but a restructuring plan through the court, it should be binding on all bondholders shall it becomes effective. The deadline for participating in the restructuring support agreement is 5 December 2025, and the participated bondholders will receive an instruction fee.
- This restructuring plan will cover the two USD bonds (principal amount of approximately USD 600 million), one HKD convertible bond (principal amount of approximately USD 133 million), and other additional debts (if any). It also includes all the unpaid accrued interest up to 30 June 2025.
- In this latest plan, E-House will convert all debts into the shares of E-House (2048.HK), and every USD 1,000 of claim amount will be converted into 4,191 newly issued shares. In other words, the conversion price is approximately HKD 1.86 per share.
- Assuming there are no additional debts, the total amount of instruction fee is about 292 million shares, representing around 5% of the post-restructuring shares outstanding. The instruction fee will be allocated to creditors who participated in the restructuring support agreement on a pro-rated basis.
- Using E-House’s current share price (HKD 0.079 per share), this debt to equity plan is expected to bring more than 95% principal haircut to creditors, and it is yet to factor in the impact of share dilution on stock price. However, the company believes the plan is the only practical way to offer any recovery value to offshore creditors.
- After the completion of restructuring plan and assuming no additional debts, offshore creditors (including instruction fee) will receive in aggregate around 70% of the company’s shares (see Chart 1).
Chart 1: Change in Shareholding Structure
Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds the position in EHOUSE 7.625% 18Apr2022 Corp (USD) and the analyst who produced this report hold a NIL position in the abovementioned securities.