[Epoch Times October 05, 2021](Epoch Times reporter Liu Yi comprehensive report) Mainland real estate company Fantasia Holdings Group Co., Ltd. issued an announcement on the evening of October 4, stating that a US$205 million bond bill of the company is due on the 4th. , But the company failed to pay as scheduled. Fantasia was founded by Zeng Baobao, the niece of former president of the Chinese Communist Party Zeng Qinghong.
The announcement on October 4 of Fantasia showed that the remaining outstanding principal amount of the 2021 bills was US$205,656,000. All the outstanding principals of the bills were due on October 4, 2021, and the company did not make payments on that day. The company will issue a further announcement when it becomes aware of any further developments related to this event.
The announcement also stated that the company’s shares will temporarily stop trading on the Stock Exchange from 9 a.m. on September 29, 2021, until further notice.
The announcement indicated that the company’s executive directors were Mr. Pan Jun, Ms. Zeng Baobao, Mr. Ke Kasheng, Mr. Zhang Huiming and Mr. Chen Xinyu.
Fantasia’s liquidity crisis has already begun to take shape earlier. According to the “Securities Times” on September 5, in May this year, Fantasia’s US dollar debt experienced a significant decline. Its U.S. dollar bond due in March 2024 has a record drop. The bond fell 2.9 cents to 90.5 cents per dollar, the largest one-day drop since its issuance in February 2021; in addition, the bond due in July 2023 was 9.25. % Bonds fell 3 cents to 89.7 cents per US dollar; 11.875% bonds due in June 2023 fell 2.7 cents to 96.3 US cents per US dollar.
Faced with the decline in bonds, Fantasia frequently carried out repurchase activities to stabilize market confidence.
According to news from Hong Kong 01 News on September 7, Fantasia’s executive director and the company’s controlling shareholder Zeng Baobao directly wholly-owned the company Zhenbao Art Foundation Co., Ltd., respectively, spent US$1 million and purchased US$300 million issued by the company in 2022. The 11.75% senior notes and the company’s USD 350 million 12.25% senior notes maturing in 2022.
In addition, Fantasia purchased senior notes issued by the company for US$5.5 million on the open market, of which US$3 million was used to repurchase notes maturing in October this year, and the remaining funds were used to purchase the company’s maturity in December and 2023. Notes due in January and June.
Fantasia explained that the purchase of relevant bills can reduce future financial expenses and financial assets and liabilities, which is in the interest of the company and shareholders as a whole.
Data shows that currently, Fantasia Holdings co-exists with 11 US dollar debts, with an existing scale of 4.017 billion US dollars, of which 1.35 billion US dollars of debt will mature within one year. Among these 11 bills, 6 have coupons exceeding 10%, and the highest coupon rate is as high as 14.5%.
Facing the new crisis of liquidity, the three major international rating agencies respectively lowered the ratings of Fantasia.
On September 27, Moody’s downgraded Fantasia Holdings’ family rating from “B2” to “B3”; on September 16, Fitch downgraded Fantasia Holdings’ long-term foreign currency issuer default rating (IDR) from “B+” To “B”, the outlook remains “negative”; on September 14, Standard & Poor’s announced that it would adjust the outlook of Fantasia Holdings to negative, confirming the “B” rating.
China Chengxin International, a mainland rating agency, also adjusted Fantasia’s rating outlook to negative on September 29.
According to Bloomberg’s news, the private banking departments of banks such as Citigroup and Credit Suisse set Fantasia’s bonds as “zero loan value”, which means that the private wealth customers of these banks can no longer use Fantasia’s bonds as collateral to obtain collateral. loan.
Because Fantasia was a company founded in 1996 by Zeng Baobao, the niece of the former Politburo Standing Committee of the Communist Party of China and Vice President Zeng Qinghong. Zeng Baobao is still the company’s executive director and major shareholder. The default of the company’s bonds shows that the company has not borrowed from a mainland bank. money.
In this regard, commentator Zhang Tianliang stated in his YouTube We-Media program that this incident shows that Zeng Qinghong has lost his power in the mainland. If Zeng Qinghong’s influence is still there, Zeng Baobao’s loans in the mainland will be easy, and now he can’t even get loans. Come out, and there are bonds as collateral, showing that Zeng Qinghong’s general trend is gone.
In the first half of this year, after excluding advance receipts, Fantasia Holdings had a debt-to-asset ratio of 72.7%, a net debt ratio of 74.8%, and a cash short-term debt ratio of 1.59. In accordance with the CCP’s “three red lines” requirements for real estate companies, Fantasia has stepped on a red line.
Editor in charge: Li Muen#
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