Chinese developer SCE Group seeks offshore debt restructuring after default (updated)

China SCE group

04/10/2023 07:02

(Adds context in paragraphs 3,4,9,10, updates stock price)
       HONG KONG, Oct 4 (Reuters) - China SCE Group  1966.HK 
said on Wednesday a non-payment on a syndicated loan has
triggered a default under its dollar bonds and it would explore
a holistic solution to all its debt.     
    The Xiamen-based company is the latest to join a long list
of Chinese property developers who have defaulted their offshore
debt and begun a restructuring process. But only a handful have
announced restructuring terms so far. 
    China Evergrande Group  3333.HK , in the centre of the
sector's debt crisis, said last week its main unit in China was
unable to issue new debt due to an ongoing investigation,
complicating its restructuring plan that creditors were
originally scheduled to vote on this month.
        The market is also watching if China's largest private
developer Country Garden  2007.HK  will avoid a default again
mid-this month, by making $15 million 
    coupon payment
     before the grace period ends.
  
    SCE said in a Wednesday filing it will suspend trading in
its four dollar bonds worth a total of $1.8 billion from
Thursday. 
    "The group's liquid cash and bank deposits may not be
sufficient to meet its current and future obligations," the
developer said, citing declining sales and tightening liquidity
since the second quarter .
    It said the payment it did not make was on an instalment of
principal and interest worth $61 million of a March 2021
syndicated loan, which may result in demands for early repayment
from its other creditors. It has not received such demands yet,
however, it added.    
    Shares of SCE were up 1.75% as at 0537 GMT following the
announcement, narrowing from a 3.5% gain in the morning.
    Confidence in the property sector, which accounts for
one-fourth of economic activity, has sunk since 2021 when a
crackdown by Beijing on credit accumulation by developers
fuelled a debt crisis. 
    China's new home prices rose slightly in September, breaking
a four-month decline, private data showed, as developers sped up
launches to take advantage of a recent slew of support measures,
including easing some borrowing rules and relaxing of home
purchasing curbs in some cities.

 (Reporting by Clare Jim; Editing by Christian Schmollinger and
Shri Navaratnam)
 ((clare.jim@thomsonreuters.com;))