Once again, Sun Hongbin bet on his own wealth.

After spending 2.9 billion out of his own pocket to provide an interest-free loan to Sunac China last year, Sun Hongbin proposed another plan to guarantee a bond that Sunac plans to extend, involving 4 billion.

Wall Street News learned that Sunac planned to extend a 4 billion yuan domestic public offering bond that was originally sold back on April 1 for 24 months, and repay the principal on a quarterly basis. The interest is also planned to be extended.

Strictly speaking, this is not an extension in the general sense, but a natural continuation. This putable debt was originally 2+2. If it is not put back, it will continue to be held. It will not officially mature until 2024.

Unlike most other insured real estate companies, Sunac is currently only negotiating an extension for this debt, and is not involved in other, forward debts.

The most attractive thing about the current preliminary extension plan is that Sun Hongbin, chairman of the board of directors of Sunac China, will provide unlimited joint liability guarantee.

In other words, Sun Hongbin has to stake his own wealth and credit for the extension of this debt. This is after Sun Hongbin used his own money to lend nearly 2.9 billion to Sunac China in the form of an interest-free loan in November last year. He once again used his own practical actions to show his confidence in Sunac.

Lao Sun has left his cards on the table, and investors need to give their votes in less than a week, whether to say goodbye or to trust Sun Hongbin again.

This is a situation that investors did not expect. Because Sunac had previously said that it had prepared the money for the resale, they also trusted Sun Hongbin. However, less than a week before the resale payment date, this situation occurred.

Indeed, Sunac’s decision to extend this period is somewhat sudden. Previously, Sunac had issued a fatal order internally to protect the group's public debt, but the situation was stronger than others, and Sunac's current pressure was too great.

Since the real estate funding dilemma in October 2021, as one of the four giants, Sunac has actively continued to make money through equity placements, major shareholder loans, asset disposals and other channels to promote a smooth and slow flow of funds, totaling About 30 billion yuan of funds will be withdrawn to supplement debt repayment and operations.

So far, the repayment status of Sunac’s commercial bills and trusts is also good. Last month, Sunac repaid two debts totaling approximately 4.25 billion yuan as scheduled, showing that although its liquidity was under pressure, it would never lie down on its debts.

In the past month, Sunac has negotiated cooperation with AMCs including Cinda on some specific projects; it has also collected debts owed in some places. But as people close to Sunac said, “the plan is progressing slowly.”

People close to Sunac said that in order to cope with the public market debt due in the second quarter, Sunac had previously actively promoted various financing plans such as asset disposal, special financing, and collection of arrears, but the progress of the plan Delay and extension are really “last resort” options.

After the Spring Festival, although the real estate policy has been warm, Zhengzhou has introduced the "Nineteen New Deals" for the property market, and high-level briefings have boosted confidence, but the recovery in sales is not a temporary success.

Many market observers said that in March, especially in the first two weeks, hot first- and second-tier cities across the country did not show substantial recovery, and their performance was lower than expected, and continued policy efforts are still needed.

The regulation of pre-sale funds, which has put huge pressure on the cash flow of real estate companies, has not been significantly relaxed. According to Wall Street News, due to the harsh withdrawal conditions, Sunac has hundreds of billions of sales funds frozen in the pre-sale fund supervision account and cannot be used for its own purposes. The same is true for most other real estate companies.

This can be said to be the most difficult moment for Sunac. The largest private real estate developer after Evergrande and Country Garden needs to find a balance between handling mature debt and operating stability.

As the helmsman, Sun Hongbin needs to make the right decision and also needs the support of investors.

While the financing side is still recovering slowly, Sunac’s hope still lies in the sales side. Only by preserving strength through extension and ensuring normal operations and project delivery can we survive the difficulties and live longer.

Wall Street News also learned that Sunac’s Oceanwide International No. 1, which has a salable value of more than 30 billion, has recently accelerated its pace to be launched on the market. In addition, in cities such as Shanghai, Sunac also has many projects this year. A popular project entered the market. This will help Sunac overcome the current difficulties and restore its own strength.

It is true that as one real estate company has been in danger recently, investors’ confidence in the company is at a freezing point; but it should also be noted that the improvement of land auction rules in many cities, the liberalization of private enterprises on the financing side, The gradual recovery of the sales market is gradually bringing the industry back on track.

The real estate sales and investment sides are not far away from picking up. Lin Zhong, chairman of Xuhui Group, said that it is winter now, not the end, and spring is not far away! This year, the market will be low and then high, and the market will gradually recover. We look forward to the "Little Indian Summer" in May and June.

Sun Hongbin and other real estate company bosses like him also believe that only by maintaining credit today can the company have a future.

Everything Sun Hongbin has done in the past also shows that he is a person who is willing to bet on Sunac and is unwilling to give up easily. From paying 2.9 billion out of his own pocket to providing 4 billion in unlimited joint and several liability guarantees, he has shown his sincerity. It depends on whether investors are willing to wait and come ashore with him.