Sunac China Holdings has sold a 46.7% stake in Harbin Ice and Snow World Park for approximately 1 billion yuan (US$138.1 million) to Harbin Sun Island Group [718ba735]. This divestment is part of Sunac's broader strategy to manage its US$2 billion in onshore debt, which has become increasingly pressing due to ongoing liquidity issues in China's property sector since the implementation of the 'three red lines' policy in 2020. The sale proceeds will be allocated as follows: 202.6 million yuan will be used to repay Snow World, 404 million yuan will settle a pledged loan, and 404.6 million yuan will be directed into a special account for property delivery [718ba735].
The challenges facing Sunac are reflective of a larger trend within the Chinese real estate market, where home prices have plummeted by 30% since their peak. The company currently has 15.4 billion yuan in unpaid onshore bonds and proposed four debt restructuring options to creditors in November [718ba735]. Despite these challenges, new home sales in China rose by 7.1% in October 2024 compared to the previous year, indicating a potential recovery in certain segments of the market [718ba735].