State-backed Sino-Ocean seeks 2-mth extension for $50 mln coupon payments

Central China Real Estate

27/07/2023 12:12

HONG KONG, July 27 (Reuters) - Chinese state-backed
property developer Sino-Ocean Group  3377.HK  is seeking
creditor approval to extend upcoming coupon payments for three
dollar bonds worth a total of $50.1 million for two months.
    The Beijing-based company is the third state-backed
developer to face offshore repayment problems, signalling a
deepening of the debt crisis in the sector. Greenland Holdings
 600606.SS  and Central China Real Estate  0832.HK  are the two
other state-backed companies. 
    Sino-Ocean said in filings late on Wednesday an event of
default would likely occur for the 2024  HK109086452= , 2027
 HK116372258=  and 2029  HK203482256=  notes if creditors do not
approve the payment extension, and cross defaults could be
triggered. 
    The payment problems add to the debt woes plaguing the
Chinese property sector as more liquidity troubles have surfaced
in the past weeks despite policy support.    
    The three bonds have coupon payments due July 30, Aug 4 and
Aug 5, respectively. Creditors would receive 0.1% of their
principal holding as consent fee if they agree to the extension
before the deadlines.
    Sino-Ocean has previously said it is also in the process of
seeking creditor approval for an extension for an onshore bond
due Aug 2. Bloomberg News reported on Thursday some investors
said they were told funds were remitted for a missed coupon due
July 13 for a 2025 bond  HK235427125=  as a 14-day grace period
was coming to an end. 
    "Despite... efforts to enhance its liquidity position, there
are uncertainties over debt refinancing and challenging
operating and funding conditions and the group's liquidity
pressure persists," Sino-Ocean said in the Wednesday filings.
    The company's 2024 bond traded at 12.449 cents on the dollar
on Thursday as of 1012 GMT, down from 12.9 cents before the
Wednesday filings, while 2029 bond traded at 9.055 cents, down
from 9.5 cents. 
    

 (Reporting by Clare Jim; Editing by Jane Merriman)
 ((clare.jim@thomsonreuters.com;))