[Epoch Times December 06, 2021]China Aoyuan finally disclosed its payment plan recently after it was revealed that financial management was overdue. At present, the Hong Kong stock price of this Chinese real estate developer has fallen by about 80% compared to six months ago, and the total market value has evaporated by about HK$19.6 billion.
Recently, China Aoyuan published a “Letter to Investors” on its official website, frankly saying that some of the investment products guaranteed by the company were overdue. According to previous news from China Business News, Aoyuan’s total financial management totaled about 6 billion yuan, involving about 1,500 investors and 669 employees and relatives.
Aoyuan responded in the letter that up to now, the company’s related funds and Ding Financial products total about 6 billion yuan, and the Ding Financial products managed by third-party companies are about 2.4 billion yuan, totaling about 8.4 billion yuan.
The mainland media “International Finance News” reported that in response to the overdue redemption crisis, Aoyuan said that it has initially formulated a cash installment and physical asset redemption plan.
Aoyuan stated that in addition to the contract stipulating that the principal and interest are resolutely paid in full and the premium property assets with a total value of not less than 9 billion yuan are used for physical payment, the company will pay the overdue principal at an annualized 6% interest rate. Interest.
As of the close of trading on December 3, China Aoyuan Hong Kong shares fell 11.88%, and the market value has fallen below HK$5 billion. Compared with the share price of 8.3 Hong Kong dollars six months ago, the stock price has fallen by about 80%, and the total market value has evaporated by about 19.6 billion Hong Kong dollars.
An insider of China Aoyuan revealed to China Business News that since Fantasia’s default in early October, creditors have successively asked China Aoyuan to repay the loan early. Pressure was already felt internally at the time, and successive downgrades by rating agencies triggered it. The creditors also demanded Aoyuan to repay the debts in advance. The sudden increase in debt settlement requirements caused Aoyuan to be embarrassed for a while.
Since mid-October this year, the three internationally renowned credit rating agencies Fitch, Standard & Poor’s (S&P) and Moody’s have repeatedly downgraded China Aoyuan, Kaisa Group, Fantasia, Greenland Holdings, and Sunshine. The rating of China’s real estate companies such as City, R&F Properties, etc. is due to financial crisis.
The downgrade has almost closed the door to the overseas financing market for real estate companies. In addition, domestic financing is not easy. For the long-term development of real estate companies with “high financing, high debt, and high leverage”, the “three red lines” officially set by the CCP have become “blockers” on the road to financing.
In the first half of this year, Aoyuan added 37.8 billion yuan in loans, repaid 40.9 billion yuan in loans, and net cash from financing activities-12.2 billion yuan.
Affected by the downturn in the industry, Aoyuan, which has encountered difficulties in financing, “returns blood” through project de-sales (sales) is not ideal.
The tight liquidity of funds has undoubtedly intensified the debt repayment pressure of Aoyuan Gaoqi. As of the end of June this year, Aoyuan had total assets of 316.2 billion yuan and total liabilities of 262.9 billion yuan, of which about 51.7 billion yuan of debt will mature within one year, and 60.645 billion yuan in cash in hand.
It is worth mentioning that Kaisa Group announced on December 3 that it failed to seek a renewal (grace date) for a note with a total principal amount of US$400 million.
On the same day, Evergrande Group also issued an announcement stating that it had received a guarantee obligation request of US$260 million, but “in view of the current liquidity situation, the group is uncertain whether it has sufficient funds to continue to perform its financial responsibilities”, which aroused concern from the outside world. .
Editor in charge: Li Bing #
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