(Bloomberg) -- China Evergrande Group’s onshore unit is seeking to delay an option for investors to demand early repayment, while China Huarong Asset Management Co. resumed trading following a $6.6 billion bailout, a type of state-orchestrated rescue that appears unlikely for Evergrande.
Hengda Real Estate will hold a meeting online with investors starting Friday as it tries to delay a Jan. 8 put option, it said in a statement to the Shenzhen stock exchange. Two developers meanwhile are delaying dividend payments to hoard cash.
Evergrande shares were little changed a day after trading resumed as the company said it would work with authorities to demolish 39 apartment buildings in Hainan province that were deemed illegal. The demolition is the latest move by local governments to seize some of Evergrande’s prized land assets.
Key Developments:
- Evergrande’s 2021 Sales Plunge 39% as Home Sales Almost Frozen
- Some Kaisa Bondholders Yet To Get Coupon Payments Due Last Week
- Evergrande Hainan Order Suggests Fire Sale Difficulties: React
- Hard Landing in Property Market Would Crater China’s Economy
- DaFa Properties Postpones Dividend Payment, Sells Stake in Unit
- Surging Yields Come at Convenient Time for Beijing: China Today
- Worst Not Over Yet for China Junk Dollar Bonds: CreditSights
Chinese Developers Delay Dividends Amid Payment Pressure (11:20 a.m. HK)
Two Chinese real estate firms are delaying interim dividend payments by months, the latest step by companies in a sector facing mounting bills and limited fundraising options.
Zhongliang Holdings Group Co. and DaFa Properties Group Ltd. both said in Hong Kong stock exchange filings dated Tuesday that the payments were being pushed back to preserve cash.
Condemned Towers on China’s Hawaii Show New Threat (11:15 a.m. HK)
The wrecking ball headed for 39 apartment blocks on a tropical island at the southern tip of China poses the latest threat for Evergrande as local governments race to reclaim land ahead of a looming restructuring of the embattled developer.
The government of Danzhou, a city in the province of Hainan, has asked Evergrande to tear down what it says are illegal buildings within 10 days. The order was signed Dec. 30, meaning the company could start demolition work on the near-complete condos by Jan. 9.
The Hainan order is among the most extreme in a spate of government actions to seize Evergande’s property and land holdings, underscoring risks to its most-prized assets as the firm prepares for what could be the largest restructuring ever in China. In recent months, at least 11 land parcels have been targeted for confiscation by local authorities for reasons ranging from idle projects to missing fee payments.
Evergrande Unit Proposes Delaying Yuan Bond Repayment (11:10 a.m. HK)
China Evergrande Group’s onshore unit will hold a meeting for holders of one of its local yuan-denominated bonds, as it seeks to delay an option for investors to demand early repayment.
Hengda Real Estate will hold the meeting online Jan. 7-10, it said in a statement to the Shenzhen stock exchange. The bond concerned is its 4.5 billion yuan ($706 million) 6.98% security due 2023, which has a Jan. 8 put option. The company is proposing to change that option date as well as an interest payment also due that day this year to July 8.
The note will be suspended from trading from Jan. 6. Bondholders will review the company plan for the changes and the adjustment wouldn’t trigger default, according to the statement.
Huarong to Resume Trading After a $6.6 Billion Bailout (8:15 a.m. HK)
China Huarong is set to resume trading in Hong Kong on Wednesday morning after the troubled financial giant raised $6.6 billion in a state-orchestrated rescue that brought it back from the brink of a crisis.
The Beijing-based distressed asset manager applied to resume trading as it fulfills share resumption guidance, according to a statement filed with the Hong Kong stock exchange. The company said it has taken measures to return to its core business, simplify its structure, reduce capital consumption and increase returns.
China Huarong reported profit of 1.62 billion yuan ($255 million) in the first six months of 2021, which compares with a loss of about 106.3 billion a year earlier. Chairman Wang Zhanfeng is expected to hold a press briefing on Wednesday.
©2022 Bloomberg L.P.
