(Bloomberg) -- Shares in China Evergrande (HK:3333) Group jumped the most in 10 weeks, following its bonds higher, after signs of progress in what will likely be one of China’s largest restructurings. The company faces coupon payment deadlines totaling $352.5 million on Monday.
Agile Group Holdings Ltd., the junk-rated Chinese property developer, will sell its 26.7% stake in a Guangzhou property joint venture for 1.84 billion yuan ($290 million), the latest sign that asset sales to state-owned firms may help ease the industry’s liquidity crisis.
Chinese developer Yuzhou Group Holdings Co. said it won’t pay off two dollar bonds due this week, meaning some events of default will occur, as builders continue to struggle to meet debt payments. A recovery in China’s stricken property industry could take six to 12 months on an optimistic basis if a potential easing of escrow rules occurs, CCB International said.
Key Developments:
- China Builder Agile to Sell $291 Million JV Stake to State Firm
- Pudong Bank Prices 30b Yuan Bond Partly for Property M&A Loans
- Vanke Overseas to Raise Net GBP56m From London Property Sale
- Evergrande Appoints Cinda’s Liang as Non-Executive Director
- China’s Wild Markets Raise Stakes for Traders Buying Into Rally
Pudong Bank Prices 30b Yuan Bond Partly for Property M&A Loans (9:52 a.m. HK)
Shanghai Pudong Development Bank priced a 30 billion yuan 3-year bond at 2.69% on Friday, with part of proceeds to be used for funding mergers and acquisitions in the property industry.
The two-part bond’s 5 billion yuan tranche, which will be used to grant loans for such transactions by developers, was 1.79 times subscribed, people familiar with the matter said.
China Evergrande Shares Jump on Progress Signs (9:50 a.m. HK)
Shares in China Evergrande Group jumped the most in 10 weeks, following its bonds higher, after signs of progress in what will likely be one of China’s largest restructurings.
On Friday, the company’s note due 2025 climbed the most since late September, after REDD reported that the Guangdong government plans to release a debt restructuring framework by March.
Guangdong’s local government proposes to restructure Evergrande’s debt out of court and plans to separate the offshore debt and assets from the company’s onshore overhaul, according to the REDD report.
“We view this development positively as it provides some guidance on likely recovery values,” said Charles Macgregor, head of Asia at Lucror Analytics, adding that offshore investors may expect to receive 20-25 cents on the dollar.
China Builder to Miss Dollar Bond Payments After Debt Exchange (9:05 a.m. HK)
Chinese developer Yuzhou Group Holdings Co. said it won’t pay off two dollar bonds due this week, meaning some events of default will occur, as builders continue to struggle to meeti debt payments.
The company earlier this month offered to swap the notes for new debt, and investors exchanged most of their holdings. There’s $104.9 million of combined principal remaining, Yuzhou said in a Monday stock exchange filing, and it’s opting not to pay that while planning to relaunch the exchange offer this week.
China Builder Agile to Sell $291 Million JV Stake to State Firm (8:15 a.m. HK)
Agile Group will sell its 26.7% stake in Guangzhou Lihe Real Estate Development, a property joint venture, for 1.84 billion yuan, it said in a Hong Kong stock exchange filing. Purchaser is Guangdong Zhonghai Property, an indirect wholly-owned unit of China Overseas Land & Investment.
Agile expects to make a gain of around 698.7 million yuan from the sale and plans to use the net proceeds for general working capital and future business development.
Vanke Overseas to Raise Net 56 Million Pounds From London Property Sale (7:07 a.m. HK)
An indirect subsidiary of Vanke Overseas entered into an agreement to sell a property in London to M&G TS Ryder, according to a Hong Kong stock exchange filing.
The property is Ryder Court located at 13-17 Bury Street and 12, 14, 16 Ryder Street in London.
Evergrande Appoints Cinda’s Liang as Non-Executive Director (Sunday, 7:25 p.m. HK)
China Evergrande Group has appointed the chairman of China Cinda (HK) Holdings Co. as a non-executive director, the property developer said in a filing to the Hong Kong stock exchange. Liang Senlin has been chairman of China Cinda (HK) since May 2019.
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