FILE PHOTO: An advertisement of property developer Sunac China Holdings is seen at a residential complex in Shanghai, China March 25, 2018. REUTERS/Stringer
HONG KONG: Chinese property developer Sunac China said on Wednesday (Mar 30) it will hold an online meeting with holders of a 4 billion yuan ($629 million) bond, seeking to extend principal payment due on Friday by 18 months.
Hong Kong-listed shares of Sunac, China’s No. 3 property developer by sales, jumped more than 21 per cent on Wednesday afternoon, versus a 7per cent rise in the Hang Seng Mainland Properties Index.
The meeting with bondholders will take place on Thursday and Friday, when they will vote on whether they accept the proposal. The onshore bond will mature on Apr 1, 2024, but investors have a put option to sell back to the company on Apr 1 this year.
Sunac said in separate filings that the extension proposal is designed to ensure the bond’s interest payment under its current operating status, and it has applied to suspend trading of the bond from Thursday.
The company said late last month it had prepared sufficient funding to repurchase the bond. Earlier in March, it added a put option date of April 2023, on top of the existing option for this April.
To improve the credit risk profile of the bond, Sunac said in a filing company chairman Sun Hongbin will provide personal guarantee, and stakes and receivables of three project companies will be added as collateral.
The share price surge comes two days before the stock is to be suspended under Hong Kong listing rules because the firm will not be able to publish unaudited 2021 financial results by the end of March.
The company on Monday said the delay in publishing results is because of ongoing communications with offshore creditors on debt solutions after recent downgrades by global rating firms, as well as the proposed put option extension of its onshore bonds.