[Epoch Times November 26, 2021](Epoch Times reporter Li Jing comprehensive report) Following Evergrande, Fantasia and Kaisa, another Chinese real estate giant, Aoyuan Property, is in debt crisis. According to insiders of the group, the sudden increase in debt settlement requirements recently caused Aoyuan to be embarrassed on all sides for a while.
According to a report by China Business News, on the evening of November 22, China Aoyuan Real Estate issued an announcement stating that the extension plan of the Zhongshan Securities-Aotron Phase II Asset-backed Special Plan issued by its indirect wholly-owned subsidiary, Aoyuan Group, has been passed.
Wind data shows that the ABS private placement bond issuance scale is 816 million yuan, the initial coupon rate is 5.6%, and the maturity date is May 20, 2022, and November 22, 2021 is the sale exercise date. The adoption of the extension plan means that investors will not ask for resale.
“The holders of the second-phase asset-backed securities of Aotron have approved the extension of the redemption date.” China Aoyuan said in the announcement.
According to the news on the 25th of “Wall Street Information”, after an ABS renewal was passed two days ago, China Aoyuan has another domestic private placement debt renewal plan passed. In two days, Aoyuan still has a domestic private placement bond extension yet to be negotiated. If approved, Aoyuan’s recent maturity of three private placement bonds will all be successfully extended.
Unlike other real estate companies where financial management is overdue or domestic and foreign bond defaults, before China Aoyuan issued a renewal plan, it did not have any public differences.
However, since the beginning of November, many investors said that China Aoyuan is conducting renewal negotiations on several private placement bonds at the same time. However, the negotiations between Aoyuan and the investors were not smooth, and the extension negotiations were also shelved.
It was not until mid-November that related negotiations were restarted again. In the plan at that time, China Aoyuan gave a similar plan to the investors of the three private placement bonds, paying 10% on the maturity date, and then paying 10% in the next month, and fully redeeming them one year after the maturity date. At the same time, Aoyuan also provided a plot of land for mortgage guarantee for the extension of these three private placement bonds.
But the next step for China Aoyuan is not easy. In January next year, Aoyuan will have two US dollar debts maturing one after another, with a total balance of US$686 million.
Looking back 3 weeks ago, due to Fantasia’s “Lying Ping” superimposition rating agency successively downgrading ratings, China Aoyuan’s domestic and foreign creditors required the company to pay off its debts in advance, leaving this tightly funded company into a run. There are still four places. The potential for fire.
For China Aoyuan, the starting point for a new round of crisis seems to be that since mid-October, the three major international rating agencies Standard & Poor’s, Moody’s, and Fitch have initiated collective downgrades of domestic real estate companies.
Many agencies have drastically downgraded corporate credit ratings, and the biggest and most direct impact on real estate companies is the restlessness of creditors. After successive downgrades of ratings, certain terms will be triggered, triggering a default, and creditors can request the company to pay off its debts in advance.
At this time, companies with already tight funds will fall into a crisis of liquidity run. China Aoyuan began to feel the pressure of the run in early November.
According to insiders of the group, since Fantasia’s default in early October, creditors have successively proposed to China Aoyuan to repay early. Pressure was already felt internally at that time, and the successive downgrades of rating agencies triggered some foreign dollar debts. In relation to the breach of contract, the creditors also demanded Aoyuan to repay in advance. The sudden increase in debt repayment requirements caused Aoyuan to be embarrassed for a while.
In order to withdraw funds, China Aoyuan had to reluctantly break his arm. According to Caixin.com, China Aoyuan announced on the evening of November 14 that the company plans to sell all the ownership of an old building reconstruction project in Hong Kong, together with the holding company shares that hold the property, and shareholder loans for the total price. 900 million Hong Kong dollars (about 737 million yuan).
According to the Economic Observer website, China Aoyuan is considering selling its 55% stake in Aoyuan Health. It has contacted many buyers with an offer of about 3 billion yuan. However, according to other reports, the transaction has been followed by ups and downs, and no buyer has been seen so far.
Since the beginning of November, bad news in the real estate industry has continued to erupt: On November 4, Kaisa Group’s wealth management product redemption problem was exposed; Sunshine City, which is ranked TOP20, also began debt rollover negotiations; Chinese property stocks fell continuously and collectively fell.
Editor in charge: Sun Yun#
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