Sunac China received 12 bln yuan in loans as state steps up support

China CITIC Financial Asset Management

01/12/2022 12:17

BEIJING, Dec 1 (Reuters) - A project of struggling
property developer Sunac China  1918.HK  received over 12
billion yuan ($1.69 billion) in loans from Chinese banks, asset
management and trust firms, a source familiar with the matter
told Reuters on Thursday, as the state steps up its support of
the sector.
    The Beijing-based group has been struggling to repay its
creditors, and is undergoing a debt restructuring of all its
onshore and offshore bonds according to sources, after
defaulting on some dollar bonds and extending yuan bonds this
year.
    Beijing has stepped up support in recent weeks to free up a
liquidity squeeze that has stifled the industry, which accounts
for a quarter of the world's second largest economy and has been
a key driver of growth.
    Sunac China's Shanghai Dongjiadu project received financing
from China Huarong Asset Management  2799.HK , six banks led by
Shanghai Pudong Development Bank  600000.SS  and CITIC Trust,
the source said, adding that the funds were mainly used for the
development, construction and operation of the project.
    Sunac China did not respond to Reuters' requests for
comment.
    Analysts say this is the latest major bailout as Sunac
China's Dongjiadu project, located in the heart of Shanghai's
Huangpu district with residential and commercial space, has an
unsold portion corresponding to a value of over 50 billion yuan.
    Many cash-strapped Chinese developers have defaulted on debt
obligations and have halted construction since a credit-crisis
hit the sector last year after Beijing cracked down on a
debt-fuelled building boom in the world's second-largest
economy.
    On Nov. 11 the central bank rolled out a rescue package and
this week the securities regulator lifted a ban on listed
property companies raising capital through equity offerings.
    A growing list of Chinese developers have entered into or
are preparing to kick-off debt restructuring talks with offshore
bondholders after defaulting on payments.
    Sunac China is now in talks with creditors to restructure
all of its 14.6 billion yuan onshore bonds, three sources with
knowledge of the matter told Reuters on Nov. 15.  urn:newsml:reuters.com:*:nL1N32B0FA
 ($1 = 7.0875 Chinese yuan renminbi)
 (Reporting by Liangping Gao, Shuyan Wang and Ryan Woo; Editing
by Elaine Hardcastle)
 ((gao.liangping@thomsonreuters.com;))