Chinese Property Crisis Just Won't Go Away, Sunac's Case Shows
(Bloomberg) -- Sunac China Holdings Ltd., one of the first major Chinese developers to complete an offshore restructuring, is starting the process all over again, as it joins a growing number of builders facing persistent liquidity problems amid a prolonged property crisis.
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The company said it has begun offshore debt restructuring work and has appointed Houlihan Lokey (China) as financial adviser and Sidley Austin as legal adviser, according to a filing to the Hong Kong stock exchange.
The move makes Sunac the first major Chinese builder to pursue a second-round restructuring since the debt crisis began.
Sunac's woes highlight the challenges faced by many defaulted developers that don't have the liquidity to restructure their debt. Builders are still under pressure as home prices in China continue to fall, despite government efforts to prop up the property market. And even if a restructuring gets approval from a court, the company still must have enough liquidity to complete the deal.
'Most defaulted players still have poor contracted sales, cash collection and access to new funding,' said Zerlina Zeng, head of Asian strategy at Creditsights Singapore LLC. That constrains their willingness to work out a better deal with offshore bondholders, she added.
One of Sunac's creditors, China Cinda HK Asset Management Co., has filed a liquidation petition against the company, and told a court in Hong Kong on Monday that the company hasn't offered any terms for the new offshore restructuring. Sunac's lawyers said the company needed more time to develop its plans.
'Forcing offshore debt holders to accept worse terms and deeper haircuts unfortunately might have to be used to resolve China's bad property debt,' said Zeng.
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Shaffan Mustafa was laid off for the first time in 2020. Four years later, in January 2024, the software engineer in Ohio was laid off again. Then, in September, he was let go from a contract job. "I wish I could say I didn't have experience with layoffs, but unfortunately, I have a bit too much," he tells me. The first time, he found it depressing. It took him 10 months of scouring job boards and hundreds of unanswered applications before he landed his next role at a local consulting company. The second time, says the 29-year-old, "I was still sad about it, but at that point it wasn't as unexpected." His third layoff in five years has been different. In the middle of yet another job search a few months ago, he came across a Substack called Laid Off. "I probably typed something like 'being laid off sucks' and found it that way," he says. After reading several people's layoff stories on the Substack, he felt less alone. 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In August 2024, she shared her first post, an interview with a social media producer laid off from Condé Nast, asking her questions such as, "Where were you when you found out?" and "What was your greatest financial concern with the sudden loss of income?" and "Has being laid off changed how you view your relationship to work?" She has since been inundated with people willing to share their stories. Within two months, Laid Off grew to 5,000 subscribers. Recently, it surpassed 10,000. The number of Americans facing long-term unemployment has crept up from 1.05 million in February 2023 to over 1.67 million as of last month. Since 2022, more than half a million tech workers have been laid off — one analysis found there had been about 90,000 tech layoffs in the first five months of 2025. Amid the job losses, a new culture around layoffs has sprung up. Workers are livestreaming their layoffs to audiences of millions on TikTok. 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The post-layoff note, with its cheery tone and calls to "reach out if you're hiring," quickly became standard practice. As more layoffs have hit in the past year, the stigma has vanished even more. "It used to be if you got laid off, it's because you're a screwup — you're just a bad employee," Mustafa says. "Now it's just par for the course." For some, being laid off became not just a LinkedIn update but lucrative content. Giovanna Ventola, a commercial real estate worker, first went viral for sharing advice to other job seekers after being laid off three times in three years, Bloomberg reported. She has gained nearly 30,000 followers sharing her perspective on coping with unemployment and has launched a professional networking platform, Rhize. Others have documented their days-in-the-life navigating being newly unemployed. In her newsletter, Ehrenkranz has spotlighted stories from everyone from a design intern for the National Park Service to a creative director at Google. "I definitely think it's opening up people's eyes to the fact that a layoff is not this thing that happens to a certain type of person in a certain industry," Ehrenkranz says. "It's something that can happen to anyone." The new visibility of layoffs doesn't make it any easier when a call with HR gets added to your calendar. Research published in the International Journal of Mental Health found that losing a job increased the risk of depression, risky substance use, and suicide. For Mustafa, being laid off meant involuntarily grinding his teeth at night and having debilitating stress headaches. Christine Reichenbach was laid off from her chief of staff role at the cloud computing company VMware in January 2024 while she was 34 weeks pregnant. It quickly sent her into a downward spiral. She ended up on postpartum anxiety medication and, despite having ample savings, put her baby in day care at seven weeks to frantically hunt for a new job. "It was very illogical," she says. "It's just what it did to my brain." At the time, Reichenbach was introduced to a Discord group called The Labor Club, a referral-only application-based group of 500 women who have experienced being laid off while pregnant or postpartum. "It's a specific niche that was just awful to experience," Reichenbach says. Her husband, though supportive, couldn't relate to what she was going through. "He has no idea what it's like to be laid off pregnant." Instead, she had a pool of women to turn to for both practical resources and, importantly, emotional support. After some soul-searching, Reichenbach decided to leave Big Tech altogether and founded her own company, The Phoenix Formula, at the start of this year with the goal of empowering other job seekers. She is also building her own support group, Beyond the Layoffs, on LinkedIn and Slack. "People need a space for this to actually be constructive," she says. If members need a space to yell in all caps, there's a channel for that. "I hope it's a place people can vent on a bad day and it's not on social media for hiring managers to see," she says. As the stigma around layoffs disappears, the boundaries of professionalism on social media have become increasingly blurred. Ask any recruiter, and they'll say bad-mouthing a previous employer on social media is tantamount to career cyanide. "It gives me alarm bells," says Brad Thomas, a business manager at Orange Quarter, a tech recruitment company in New York. "It's the same as when a candidate interviews somewhere — talking bad in an unprofessional manner about a previous employer is just not a good look." His advice when it comes to posting on social media is to keep it professional. In the new culture of layoffs, however, there is an important caveat. "The size of the company makes a difference," Thomas explains. "If someone has a pop at Meta or Google, it's less personal and less damaging to the brand versus a startup of 30 people." As the stigma around layoffs disappears, the boundaries of professionalism on social media have become increasingly blurred. Earlier this year, when Meta let go of some 4,000 workers, branding them as " low performers" on the way out, the departing employees refused to leave quietly, pushing back on the label on LinkedIn. As Business Insider's Aki Ito wrote, "This is something we haven't seen before in the professional world: Employees sticking up for themselves in public, and calling out their former employer for misrepresenting their work." Both the social media posts and the private communities offer a kind of testimony that shifts blame from the employee back onto the employer. Ehrenkranz has had many people tell her that being interviewed for Laid Off or filling out her surveys is a cathartic experience. "A layoff these days is a 10-minute Zoom call, shut your computer, and then you're thrown into this new chapter," she says. Having a dedicated space to talk about being laid off with those who get it is a relief for Mustafa. "I don't really feel like I'm being pushy or shoving my layoff experiences down someone's throat," he says. While there is power in numbers, for some, those numbers can be overwhelming. A friend of Mustafa's left the Discord group shortly after joining. "She was getting emotionally burned out from hearing about layoffs," he explains. "She's fortunately a freelance writer, so she's making some money. She can just tune out that stuff if she wants to. For me, I'm still desperately tuned in." Ehrenkranz focuses on making sure the Laid Off community is a toxic-positivity-free zone. "I would say the vibe is just real," she says. "There's no 'Everything happens for a reason' or 'You'll get the next one.' People don't want to hear that." Rather than just a place to wallow, many of these support groups are designed as both a safety net and a springboard for when members are ready to begin the hunt for their next role. Fana Yohannes, a social media consultant and former Meta employee, founded the group Here2Help to give job seekers a leg up. In the wake of the 2020 layoffs, she posted on Instagram that she was open to reviewing and providing feedback on five people's résumés. "One person replied and was like, actually, I'd be down to help too," she says. From there, Yohannes says, Here2Help grew to 200 mentors who helped about 2,000 people find new opportunities during COVID. "We've come to an era where layoffs are part of the job," Yohannes says. "We have to kind of be strategic." After four months of sending out applications, Mustafa has a second interview lined up for another tech role. Even if he gets the job, he plans on staying in the Laid Off community for a while — just in case. "I can't trust these people anymore," he says about employers.
