Chinese developer Agile’s interest-payment default on US$483 million bond sends shares tumbling
- Developer’s shares fell 12.9 per cent after saying it ‘will not be able to fulfil all payment obligations under its offshore debts’ because of liquidity pressure
- Agile is struggling along with the overall sector, with presales declining 68 per cent year on year to US$905 million from January to April
Agile Group Holdings slumped after the mainland Chinese developer failed to pay interest on an offshore bond, underscoring the sector’s continuing struggle with liquidity pressure despite Beijing’s supportive measures.
The stock fell 12.9 per cent to HK$0.61 on Tuesday, its steepest decline in a week.
The Guangzhou-based developer acknowledged it was unable to service the coupon on a US$483 million bond maturing in 2025 within the grace period that ended on Monday. The company “will not be able to fulfil all payment obligations under its offshore debts” in light of the liquidity pressure, according to a filing to the Hong Kong stock exchange on Tuesday morning.
“The group has been making relentless efforts to minimise the impact [of the liquidity pressure] on its business operations and fulfil its debt payment obligations to the greatest extent,” Agile said, adding that it will engage external financial and legal advisers to find solutions to its debt problems.
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Agile has been struggling along with the country’s overall sector as home sales remain sluggish. In the first four months of the year, the company’s aggregate presales had declined 68 per cent year on year to 6.55 billion yuan (US$905 million).