Many property firms in China have defaulted since the sector plunged into a debt crisis in mid-2021 following a crackdown on debt levels by the government.

The Shanghai-based developer will pay creditors a 1% upfront principal payment in cash, and the rest in a combination of 3.5-year new senior notes and new convertible bonds, it said in a filing.

Zhongliang will issue an additional 6% of the new notes, which will start incurring 5% annual interest after 12 months.

Creditors will receive a 0.25% fee to sign a restructuring support agreement before the deadline, a date yet to be decided.

Its restructuring effective date is expected to be around Jan. 1, 2024.

Shares of Zhongliang reversed losses to close up 1.5% after the announcement, while its December 2023 notes slipped to 9.225 cents on the dollar from 10.262 on Wednesday, according to Duration Finance.

Only a handful of developers have announced their offshore debt restructuring terms, with China Evergrande Group and Sunac China the most prominent.

The terms aim at freeing up the developers from repayment obligations for a few years to provide them with breathing space to get back on their feet, developers and their advisers have said.

The revival, however, seems to be uncertain as both the broader economy and the property sector are stumbling.

(Reporting by Clare Jim; Editing by Robert Birsel)