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Sector
Financials
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Market Cap £776.3m
Enterprise Value £1.26bn
Revenue £318.7m
Position in Universe 1028th / 6084

China's Evergrande to redeem $2 bln of convertible bonds early

Mon 18th January, 2021 11:34am
HONG KONG, Jan 18 (Reuters) - Indebted Chinese property
developer Evergrande Group  3333.HK  said on Monday it would
redeem early HK$16.1 billion ($2.1 billion) of convertible bonds
maturing in 2023, in a move one analyst said was a sign
investors had sought early repayment. 
    Investors have been concerned about cashflow at Evergrande,
whose interest-bearing indebtedness is about $110 billion, as
the developer scrambles to raise funds and cut debt in the face
of tighter regulations in the sector.  urn:newsml:reuters.com:*:nL4N2HD3JG  urn:newsml:reuters.com:*:nL1N2IC07C
    The company said in a filing it had arranged internal funds
to redeem the convertible bonds  VG176780096=  that carry a
4.25% coupon, plus related accrued interest. 
    Its arrangement of funds for early repayment "within a short
period of time has fully demonstrated the cash strength and
sound financial management ability of the company", Evergrande
said. 
    The Shenzhen-based developer vowed early this month to cut
its interest-bearing debt by another 20%, or 150 billion yuan,
in the new year.  urn:newsml:reuters.com:*:nL1N2JG0FR    
    A total of HK$16.2 billion of the convertible bonds, issued
in 2018, is outstanding. Investors who wanted early repayment 
had to submit a notice last week ahead of the so-called
"puttable" date of Feb. 14. 
    The coupon of the bonds is the lowest among all Evergrande's
bonds, which mostly range from high single digits to double
digits. 
    "Possibly the holders of this convertible bond demanded
Evergrande to repay the money, otherwise with its high
conversion price and low coupon, it doesn't make sense for the
company to choose this bond to redeem early," said UOB Kay Hian
director Steven Leung.    
    Evergrande declined to comment on the reason for the early
redemption. 
    The 4.25% convertible bonds have an adjusted conversion
price of HK$34.37 per share, which compared with Monday's
closing share price of HK$14.92.
($1 = 7.7531 Hong Kong dollars)
($1 = 6.4944 Chinese yuan renminbi)

 (Reporting by Clare Jim. Editing by Mark Potter)
 ((clare.jim@thomsonreuters.com; +852 2912 6653; Reuters
Messaging: clare.jim.thomsonreuters.com@reuters.net))
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