You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

China moves to give state firms more power: Evergrande update

To limit the spread of contagion from the debt-stricken industry.
Image: Andrea Verdelli/Bloomberg

There’s growing evidence that China is encouraging state-owned property developers to take market share from stressed rivals to limit the spread of contagion from the debt-stricken industry.

Officials in Guangdong province are facilitating meetings between struggling developers and SOEs to encourage mergers and acquisitions, Cailian reported. Shares of real estate firms rebounded in afternoon trade, with Shimao Group Holdings Ltd. seeing a record one-day gain of 19%. Still, Modern Land (China) Co. fell 40% after resuming trading for the first time in nearly three months.

Separately, a deadline looms for bondholders to vote on China Evergrande Group’s plan to delay an option for early repayment on one of its yuan-denominated bonds. An online meeting held by the property developer’s onshore unit Hengda Real Estate for holders of the note is due to conclude Monday.

There’s $1.42 billion of bond payments due this week among stressed builders, Bloomberg calculations show.

Key Developments:

  • Chinese Developers’ Yuan Bonds Rise as Guangdong Encourages M&A
  • Shimao Shares Surge, Bonds Gain After REDD Report
  • Crisis Flares at China Builder Modern Land After Debt Demand
  • China Developers’ Land Spending Cuts Spell Trouble for Liquidity
  • Shimao Appoints Agents to Speed Up Asset Disposal on Debt Woes
  • Guangdong Set Up Match-Making Meeting for Developers: Cailian
  • Agile Enters Pacts to Sell 14 Properties for 2.8b Yuan July-Dec
  • Jefferies, Daiwa Downgrade Shimao After Missed Loan Payment
  • Housing Crisis Gives State Firms An Edge: What to Watch in China

Evergrande Moves HQ to Guangzhou From Shenzhen: The Paper (3:36 p.m. HK)

Evergrande has moved its headquarters to Guangzhou after the developer withdrew from its Shenzhen main building in December, The Paper reports, citing unidentified people. Evergrande didn’t immediately respond to a Bloomberg request for comment.

Chinese Developers’ Yuan Bonds Rise as Guangdong Encourages M&A (3:08 p.m. HK)

Chinese developers’ domestic bonds rebounded, with some rising the most in a month, as Cailian reported Guangdong province is encouraging some SOEs to buy projects from distressed peers. Xiamen Yuzhou Grand Future Real Estate Development Co.’s 7.5% local note due 2024 closed up 8% at 33.49 yuan, according to data compiled by Bloomberg.

Shimao Shares Surge, Bonds Gain After REDD Report (2:45 p.m. HK)

The developer jumped after REDD reported that China Vanke Co. was in talks with the developer for asset acquisitions, citing an unidentified source. Investor relations officials at both firms said they had no updates when contacted by Bloomberg. A Bloomberg Intelligence gauge of mainland developers climbed as much as 4.3%, the most since Nov. 19.

Crisis Flares at China Builder Modern Land After Debt Demand (12:13 p.m. HK)

A developer of energy-efficient real estate projects, Modern Land is confronting calls from creditors for early debt repayments, as investors in the country’s beleaguered property firms grow increasingly impatient. The firm, which defaulted on principal or interest of a $250 million green bond in October, has received the demands from some holders of its $1.35 billion total of offshore senior notes, it said in an exchange filing.

China High-Yield Junk Bonds’ Returns May Fall Further: Goldman (11:42 a.m. HK)

Last week’s fresh declines in Chinese developers’ high-yield dollar bonds signal that a bottom may not have been reached yet, “unless significant easing measures directed to the sector are introduced in the near term,” says Goldman Sachs.

Developer Default Risk to Escalate: S&P (10:16 a.m. HK)

Stronger developers with better fundamentals and proactive financial management are better positioned to secure refinancing, amid cautious sentiment and elevated default risk in the industry, S&P Global Ratings says. Default risk will likely escalate in 1Q, especially if policy requirements do not meaningfully ease, it said.

Shimao Crisis Gives State Firms the Edge: What to Watch in China (8:58 a.m.)

In China’s property market, the state is advancing while the private sector retreats. Chinese authorities appear to be encouraging government-controlled firms to take market share from their stressed rivals as a liquidity crisis hammers the private sector.

Shimao Appoints Agents to Speed Up Asset Disposal on Debt Woes (8:35 a.m. HK) 

The developer is seeking buyers such as funds and international investors mainly for its commercial properties including those owned by its Hong Kong-listed real estate unit, according to Caixin, citing sources it didn’t identify. It appointed the agents in December, the report said.

Shimao, which builds residential, hotel, office and commercial properties, is among the largest debt issuers in China’s real estate sector. A unit of Shimao Group Holdings Ltd. was said to have defaulted on a local loan due by Dec. 25.

Agile Enters Pacts to Sell 14 Properties for 2.8b Yuan (8:02 a.m. HK)

Agile Group Holdings Ltd. has entered into agreements to sell 14 non-core properties at a total selling price of 2.8 billion yuan ($439 million) from July to December, according to a Hong Kong stock exchange filing. The company expects to have cash collection of around 1.65 billion yuan from the sales in 2022 and intends to use the proceeds as general working capital.

Guangdong Set Up Match-Making Meeting for Developers: Cailian (7:56 a.m. HK) 

Officials in Guangdong province set up a meeting between distressed developers and state-owned property firms, and encouraged them to discuss mergers and acquisitions of some projects, Cailian reported Saturday, citing unidentified people.

Developers that attended the meeting included China Aoyuan Group Ltd., Guangzhou R&F Properties Co., Poly Property Group Co. and China Overseas Land & Investment Ltd.

© 2022 Bloomberg

BUSINESS VIDEOS

COMMENTS   0

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: