Jinke Smart Services halts trading ahead of M&A announcement

Jinke Smart Services Co

23/05/2022 07:22

HONG KONG, May 23 (Reuters) - Chinese property management
firm Jinke Smart Services Group Co  9666.HK  said on Monday its
Hong Kong-listed shares were halted from trading pending an
announcement related to mergers and acquisitions.
    The trading halt followed reports last week that parent
company Jinke Property Group  00656.SZ  - China's 21st largest
developer by sales - might not be able to refinance maturing
onshore bonds and could extend repayments due later this week.
    One of its onshore bonds was temporarily suspended from
trading on Monday morning after dropping more than 20%, the
Shenzhen stock exchange said. 
    On Friday, Chongqing-based Jinke Property said 45.2 million,
or 0.85%, of shares worth 174 million yuan ($26.04 million)
owned by its controlling shareholder and pledged to Citic
Securities had been liquidated on May 18-19 due to default risk.
    Shares of Jinke Property listed in Shenzhen slid more than
8% on Monday, after slumping 10% on Friday. Shares of Jinke
Smart Services closed down 16% on Friday.
    China's highly-leveraged property developers have been
struggling to meet bond payments, leading to some high profile
defaults, amid Beijing's crackdown on excessive borrowing in the
sector and as home sales slow.
    S&P Global Ratings said on Monday it withdrew the rating of
Jinke Property at the developer's request, after it downgraded
the developer's long-term issuer credit rating to 'B-' from 'B+'
on Friday, and placed it on CreditWatch Negative.
    The rating agency cited Jinke's more-than-expected liquidity
deterioration, due to cash trapped in escrow accounts and
sluggish sales, as well as heightened refinancing risks, for the
downgrade.
    Purchase of Jinke Property's onshore bonds were limited to
only institutional investors from last Friday, according to a
company filing last week, a move other indebted developers
including China Evergrande Group  3333.HK  had implemented
before they faced repayment issues.

   ($1 = 6.6830 Chinese yuan)

 (Reporting by Clare Jim; Editing by Jacqueline Wong)
 ((clare.jim@thomsonreuters.com;))