Chinese developer Sino-Ocean seeks to defer US$50 million of interest payments, solicits bondholders’ approval

Name: Boom, bust and borrow: Has China’s housing market tanked?
Uploaded: 2023-07-27T08:14:16.000Z
Duration: 10 min 57 s
Description: Boom, bust and borrow: Has China’s housing market tanked?

The company has interest payments on three bonds totalling US$50 million due between Sunday and August 5

Sino-Ocean’s shares rose nearly 8 per cent to HK$0.475 on Thursday, taking the gains for the week to 21.8 per cent

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A view of the Daci Temple in Chengdu and the Taikoo Li shopping mall jointly developed Sino-Ocean and Swire Pacific. Photo: Shutterstock

Zhang Shidongin Shanghai

Published: 4:14pm, 27 Jul 2023Updated: 4:32pm, 27 Jul 2023

Sino-Ocean Group Holding is seeking creditors’ approval to delay interest payments on three bonds due in the coming days by two months as the liquidity stressed state-backed Chinese developer scrambles to avoid defaults.

The Beijing-based company has started the process of consent solicitation to extend interest payments on a US$500 million bond due 2027 and on a US$600 million bond due 2029, which are scheduled to be paid on August 4 and 5, Sino-Ocean said in a filing to the Hong Kong exchange on Wednesday night. It also requested a delay on servicing the interest payment on another 2024 US$700 million note due on Sunday, according to a separate exchange statement.

The interest payments total about US$50 million, Bloomberg data shows.

“Since early 2022, the group [has] experienced liquidity pressure due to adverse market conditions, which has resulted in reduced operating cash inflow and limited access to external capital to refinance its existing indebtedness,” Sino-Ocean said in the statement.

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Boom, bust and borrow: Has China’s housing market tanked?

Despite efforts to enhance its liquidity position, there are uncertainties over debt refinancing, challenging operating and funding conditions, while liquidity pressure persists, it added.

China’s finance ministry holds the largest stake in Sino-Ocean at 29.7 per cent.