Linklaters Guides Country Garden Through US$17.7 Billion Offshore Debt Restructuring

• US$17.7 billion offshore debt successfully restructured by December 2025

• Landmark deal sets a new benchmark for Chinese real estate restructurings

• Innovative creditor and collateral solutions deployed under tight timelines

Hong Kong: International law firm Linklaters has advised Chinese property developer Country Garden on the successful restructuring of approximately US$17.7 billion in offshore debt, a transaction widely seen as one of the most complex and significant restructurings ever undertaken by a Chinese real estate company.

The restructuring became effective on 30 December 2025 and represents a major milestone for Country Garden, which has been navigating a prolonged downturn in China’s property market. In terms of total debt size, creditor diversity, and legal complexity, the transaction is considered a new reference point for offshore restructurings involving Chinese issuers.

Linklaters was appointed in May 2024, at a critical stage for the company, and worked closely with Country Garden’s management to design and implement a comprehensive restructuring strategy. The objective was to stabilise the company’s financial position through deleveraging, extended debt maturities, and lower funding costs, all while operating within a highly constrained and volatile market environment.

According to people familiar with the matter, the restructuring had to address a highly complex capital structure, involving multiple creditor classes with differing rights and priorities. Navigating these dynamics required balancing regulatory requirements, creditor protections, and the company’s long-term viability.

One of the transaction’s defining features was an innovative creditor-ranking structure, which included the release of collateral by a group of secured lenders for the benefit of all creditors. This approach, described as a first of its kind in an offshore restructuring by a Chinese property developer, helped bridge gaps between creditor groups and accelerate consensus.

Linklaters also played a central role in managing parallel legal and regulatory challenges. The firm supported Country Garden’s engagement with the stock exchange, enabling the timely resumption of trading in the company’s shares, which was considered essential for restoring market confidence. In addition, the team helped the company secure adjournments of a winding-up petition, providing crucial time to negotiate and implement the restructuring.

Another key element involved unwinding complex cross-guarantees between the listed entity and its onshore subsidiaries, significantly reducing risk exposure at the holding company level. At creditors’ request, Linklaters also assisted in separating Forest City from the listed company, overcoming valuation, shareholder approval, and regulatory hurdles to create an executable solution.

The restructuring further included the design and implementation of a management incentive plan, structured to motivate leadership while safeguarding creditor interests. The proposal received broad support from creditors, reflecting the delicate balance struck between operational continuity and financial discipline.

The transaction was led by William Liu, Partner at Linklaters, and brought together a multidisciplinary team spanning restructuring, capital markets, corporate, banking, litigation, arbitration, regulatory, and employment law. The deal drew on Linklaters’ global network, with partners and lawyers collaborating across jurisdictions to deliver an integrated, cross-border solution under intense time pressure.

Commenting on the deal, Aedamar Comiskey, Senior Partner and Chair of Linklaters, said the restructuring demonstrated the firm’s ability to mobilise global expertise for complex strategic challenges. She noted that the transaction underscores Linklaters’ long-term commitment to clients in Asia and sets a new benchmark for offshore restructurings in the Chinese real estate sector.

William Liu described the assignment as exceptionally demanding, citing the scale of debt, the number of stakeholders involved, and the compressed timeline. He said the firm maintained open and pragmatic dialogue with management, banks, bondholders, and regulators to arrive at solutions that respected competing commercial interests while supporting the company’s long-term recovery.

Market observers say the successful completion of the Country Garden restructuring could influence how future distressed Chinese real estate deals are structured, particularly offshore. As the sector continues to adjust to tighter funding conditions and regulatory scrutiny, the transaction is expected to serve as a template for complex, multi-creditor restructurings in the region.