China's Sunac to raise $1 bln to refinance debt amid deal spree

Haitong International Securities

03/08/2017 02:04

HONG KONG/SHANGHAI, Aug 3 (Reuters) - Acquisitive Chinese 
property developer Sunac China Holdings Ltd  1918.HK  will raise 
$1 billion from banks to refinance its current debts, the firm 
said in a filing on Thursday. 
    Sunac has been making a spate of high-profile deals, 
including a deal last month to buy theme parks and tourism 
developments from Dalian Wanda Group for 43.8 billion yuan 
($6.52 billion).  urn:newsml:reuters.com:*:nL3N1KB168 
    Other deals include $2.1 billion for the real-estate assets 
of Legend Holdings, parent of PC-maker Lenovo, and $2.2 billion 
for a stake in Leshi Internet  300104.SZ , a unit of LeEco - a 
Chinese Netflix-to-Tesla-like conglomerate. 
    Sunac said the fund raising would see it issue $400 million 
of senior notes due in 2020 and $600 million due in 2022, which 
would help "optimise" its debt structure. 
    "The proceeds from the Notes Issue are intended to be used 
for re-financing the group's existing indebtedness," it said. 
    The recent deal with Wanda, which saw both firms come under 
regulatory scrutiny over potential credit risks, had to be 
amended from an earlier planned deal, with Sunac scrapping plans 
to buy close to 80 hotels from Wanda as well. 
    Sunac's Sun said at the time the adjusted deal would help 
the company's liquidity and lower its debt level. He added the 
firm had "ample" cash flow with 90 billion yuan of cash on hand. 
    Chinese conglomerates are coming under scrutiny over showy 
deals amid fears about firms taking on too much debt, creating a 
potential risk for China's financial system. 
    Sunac said the current rights issue involved banks HSBC 
 HSBA.L , Morgan Stanley  MS.N , China CITIC Bank International, 
Citigroup  C.N , CMB International, Haitong International 
 0665.HK , IBC, ICBC International and SPDB International. 
    The new fundraising comes a week after Sunac said it had 
agreed a private share sale worth $516.4 million.  urn:newsml:reuters.com:*:nL3N1KG05L 
 
 (Reporting by Donny Kwok in HONG KONG and Adam Jourdan in 
SHANGHAI; Editing by Stephen Coates) 
 ((donny.kwok@thomsonreuters.com; +852 2843 6470; Reuters 
Messaging: donny.kwok.reuters.com@reuters.net)) 
 
Keywords: SUNAC CHINA NOTES/