Landmark USD17.7 billion restructuring secures stability for Country Garden

The transaction presented multiple complexities, including cross-border issues, a compressed timetable, and coordination among diverse creditor groups. Despite these challenges, the scheme achieved overwhelming creditor support across the creditor spectrum. The restructuring underscores the increasing importance of innovative, multi-jurisdictional solutions in the wake of extended real estate sector stress in the Chinese Mainland.

The A&O Shearman team played a crucial and pivotal role in the formulation, negotiation and agreement of this restructuring.

Country Garden, one of the largest property developers in the Chinese Mainland, is incorporated in the Cayman Islands and listed on the main board of the Hong Kong Stock Exchange. Apart from its onshore projects, Country Garden has extensive investments and operations across the APAC region. In late 2023, in response to continuing adverse market conditions, Country Garden engaged with its creditors and appointed professional advisers to formulate a holistic restructuring solution.

The complexities of the borrower group’s holding structure, the mix of offshore and onshore assets and challenging creditor dynamics, necessitated the restructuring being divided into discrete stages, each with multiple workstreams. The often-competing interests of different creditor groups presented challenges to achieving consensus on fundamental aspects of the transaction, and required interim protocols on matters such as cash management and asset disposal application proceeds. The filing by an unrelated creditor of a winding up petition further compressed the timeline and heightened execution risk.

The terms of the restructuring were finalized in August 2025, when a revised Restructuring Support Agreement was launched, providing for a restructuring by way of a Hong Kong scheme involving two creditor classes.

Country Garden’s advisers, the Ad Hoc Group of bondholders’ advisers and CoCom’s advisers worked alongside each other on an accelerated timetable to convert the commercial framework into long‑form scheme documentation. This required intensive engagement and a highly collaborative approach of all the adviser teams to achieve alignment and timely delivery of executable documentation.

Viola Jing, partner, commented, “This transaction marks a significant milestone for Asia’s restructuring landscape. It is particularly encouraging to see that, despite the diverse and sometimes competing interests among creditor groups, all parties were able to reconcile their differences and unite behind a common goal. The collaborative and coordinated approach adopted by all parties was instrumental in supporting the restructuring, and the exceptionally high levels of support—over 83% by value in Class 1 and more than 96% by value in Class 2 of creditors present and voting —reflect a strong collective commitment to a successful outcome."