[Epoch Times, March 18, 2022](The Epoch Times reporter Li Jing reported) After being downgraded by a rating agency, the domestic and overseas debts of Chinese real estate giant Sunshine City Group Co., Ltd.
China Construction Bank announced on March 16 that the medium-term note “20 Sunshine City MTN001” of Sunshine City Group Co., Ltd. (referred to as “Sunshine City”) of RMB 600 million was due and payable on March 15, but the issuer failed to meet the deadline. The full payment of the interest or the repayment of the principal constitutes a material breach of contract.
On the same day, Fujian Sunshine Group Co., Ltd. (“Sunshine Group”), the controlling shareholder of Sunshine City, announced that the principal and interest of the existing overseas bond “YANGOG 12.5 02/20/22” with an existing amount of US$106 million defaulted on the principal and interest, and the outstanding value of the outstanding foreign bond “YANGOG 12.5 02/20/22” was in default of US$300 million. “YANGOG 12.5 01/04/24” defaulted on interest, and the amount of interest payable was US$18.75 million.
According to China Fund News, in the next year, Sunshine City will have bonds due almost every month, and the controlling shareholder Sunshine Group is in a similar situation, and the maturity dates are more concentrated. Since the default of the aforementioned two overseas bonds is likely to trigger accelerated repayment of other offshore financing projects, on March 11, Sunshine Group said it was evaluating assets and expected cash flow and formulating an overall restructuring plan.
Earlier, Sunshine City said in its reply to the Shenzhen Stock Exchange’s inquiry letter that the company’s available funds accounted for less than 1% of its book funds, and its cash had been exhausted.
In terms of US dollar bonds, on March 18, “SUNSHI 10 1/4 03/18/22” with a principal of US$22.76 million matured. At present, Sunshine City has a total of 8 US dollar bonds, with a total size of 2.218 billion US dollars.
In the past month, Sunshine Group and its concerted actors have added a number of passive reductions in their shares and were frozen by the judicial system.
After the explosion in Sunshine City, the company’s directors, supervisors and senior executives were in turmoil.
The first is that three directors have resigned successively, two of them from the second shareholder Taikang Department, and one from the third shareholder Huaxia Life Insurance. It is normal for these directors to resign after the capital side reluctantly left the market with huge losses. However, Dong Jiangao, who was invited by the major shareholder Sunshine Holdings, also resigned, basically declaring that the value of this ship’s nostalgia is not great.
Credit rating downgraded, financing restricted
On January 28, Sunshine City released the 2021 annual performance forecast. It is expected that the net profit attributable to shareholders of the listed company in 2021 will be a loss of 4.5 billion to 5.8 billion yuan.
Sunshine City announced on February 7 that due to a substantial loss in net profit, the company’s main credit rating was downgraded by Oriental Jincheng International Credit Rating Co., Ltd. to a negative outlook.
In addition, the credit risk incidents of Chinese real estate companies are frequent, and domestic and foreign rating agencies have successively downgraded the company’s ratings.
From mid-October 2021, the three internationally renowned credit rating agencies Fitch, S&P and Moody’s have repeatedly downgraded Sunshine City, China Evergrande, China Aoyuan, and Kaisa Group , Fantasia, Greenland Holdings, R&F Properties and other Chinese real estate companies are rated on the grounds of financial crisis. The downgrade of the rating has almost closed the door to the overseas financing market for real estate companies.
Responsible editor: Sun Yun#