Chinese property developer Zhenro’s shares and bonds plummet on redemption speculation
- Zhenro Group’s shares slumped even after the company refuted speculation that it could skip a window to redeem a US$200 million bond due next month
- Zhenro has not missed bond payments unlike its industry peers, but it has US$2.47 billion of bonds due this year
Shares and bonds of Chinese developer Zhenro Properties Group slumped amid speculation that the company does not plan to redeem a US$200 million bond next month.
The Shanghai-based developer told investors late on Thursday that its plan to call the bond remain unchanged, sources told the Post, refuting rumours which went viral earlier in the day that Zhenro could skip a window to redeem the perpetual bond to keep a comfortable level of liquidity.
The company’s reassurance did not stop investors from dumping its shares and bonds.
“It is understandable if Zhenro wishes to conserve its cash, as homes sales in February are expected to remain weak across the industry,” said Leonard Law, credit analyst at Lucror.
The Hong Kong-listed company’s shares plummeted by as much as 79 per cent on Friday. The shares eventually closed 66.4 per cent lower at HK$1.23.
Zhenro’s US$200 million 10.25 per cent perpetual bond dropped to 50 cents on the dollar by midday on Friday from 99 cents two days ago. It later recovered to 63.5 cents.