March 13 - Fantasia, the Shenzhen-based property developer that defaulted on debt in 2021, on Friday published a detailed proposal to restructure approximately $4.66 billion of its offshore liabilities. The package mixes share allotments, mandatory convertibles and secured notes as the company seeks to settle claims by offshore creditors.
Under the terms being proposed, Fantasia would issue 5.14 billion new shares to scheme creditors at HK$1.52 per share. In addition to the fresh equity, the company plans to issue zero-coupon mandatory convertible bonds totaling $501.2 million. Those convertibles would convert into 2.57 billion shares at the same HK$1.52 conversion price.
Fantasia also proposes to raise $1.44 billion through secured notes with long maturities: $632.5 million maturing in 2031 and $809.6 million maturing in 2034. Both tranches of secured notes would carry a 3% coupon.
The proposal addresses intra-group financing as well. Fantasia said it will convert the entire HK$1.31 billion shareholder loan balance into equity by issuing 4.38 billion new shares to its controlling shareholder at HK$0.30 apiece. All accrued interest on that shareholder loan would be permanently cancelled once the restructuring becomes effective.
Separately, the controlling shareholder, Baby Zeng, is set to provide a fresh shareholder loan of $6 million, bearing interest at 8% per annum. The company says those funds will be used to cover fees and expenses related to the proposed restructuring.
The move is part of Fantasia’s effort to resolve claims related to about $4.66 billion of offshore debt and follows a broader pattern of restructurings among companies that ran into trouble during the difficulties in China’s real estate sector. As of June 30, 2025, Fantasia reported about 66,972 million Chinese yuan ($9.71 billion) of total debt, according to its statement.
The firm’s proposed mix of instruments - equity allotments, mandatory convertibles and secured notes - is aimed at addressing creditor claims while converting and forgiving intra-group obligations contingent on the restructuring becoming effective. The detailed offer specifies conversion prices, coupon rates and maturities, and includes the controlling shareholder’s financial contribution earmarked for restructuring costs.
Currency reference: ($1 = 6.8961 Chinese yuan renminbi) ($1 = 7.8275 Hong Kong dollars).