China's Modern Land says bond default triggers earlier repayment deadlines, pulls dividend

Modern Land (China)

01/11/2021 15:49

Nov 1 (Reuters) - Chinese developer Modern Land (China)
 1107.HK  said on Monday a default on a bond repayment last week
has pulled forward repayment dates for a further $321 million
worth of notes, and the company withdrew an interim dividend to
hold on to cash.  
    The development highlights the impact of China Evergrande https://www.reuters.com/world/china/evergrande-makes-coupon-payment-ahead-deadline-nyt-2021-10-28
 Group  3333.HK , which narrowly averted a costly default, on
the rest of the high-yield sector as liquidity dries up and
sales slow.
    Modern Land said last week it had not repaid principal and
interest on its 12.85% senior notes with an outstanding
principal of $250 million.  urn:newsml:reuters.com:*:nL1N2RM1K2
    The non-payment triggered conditions under which other
financing arrangements, including 9.8% green senior notes due
2023 worth $321 million, may become immediately payable. No
bondholders have yet enforced any action, the company said. 
    However, the company said it has already got notices from an
offshore creditor demanding early repayment of $23.6 million,
and was in talks for a waiver to avoid the payment and further
enforcement. 
    The developer also withdrew its recommendation for an
interim dividend of HK4.81 cents per share declared in August
due to "unexpected liquidity issues", and was currently taking
stock of other repayment obligations. 

 (Reporting by Arundhati Dutta in Bengaluru; Editing by Sriraj
Kalluvila)
 ((Arundhati.Dutta@thomsonreuters.com;))