14-10-2014, 06:52 AM
(This post was last modified: 30-12-2014, 02:50 PM by CityFarmer.)
Agile Property in talks with banks to extend loan
Chinese developer's shares fall as much as 31% after trading resumes; will consider other funding options
14 Oct5:50 AM
Hong Kong
CHINESE developer Agile Property Holdings Ltd, battling an industry slowdown and media speculation about ties to China's former security chief, said that it was in talks with banks about extending what remains of a US$475 million loan due in December.
Shares in the company, which is valued at around US$2.1 billion, dropped by as much as 31 per cent, the most on record, to HK$3.30 on Monday as they resumed trading after a week's halt. The company last week scrapped a proposed US$360 million rights issue - which would have gone towards repaying the loan - and said that its billionaire founder and chairman Chen Zhou Lin had been detained.
Agile said that Mr Chen - whose family wealth of US$3.2 billion was ranked 51st in China on the 2014 Hurun Rich list - had been required by the prosecutor in Kunming City in south-east China to stay at "a designated residence" since Sept 30.
Chinese property companies face tight credit and excess supply as growth in the world's second-largest economy slows. Weaker sales have choked liquidity at some property developers, pushing them to look for fresh sources of funding.
On a call with analysts on Monday, Agile said that it was in talks with banks including HSBC Holdings, Standard Chartered and Hang Seng Bank about extending the loan.
Agile, which is currently being run by Mr Chen's wife and another relative, said that it would consider other funding options including another try at a rights offer, other forms of equity financing or commercial property sales. "Shareholders' commitment will be ready within one or two days. So you can rest assured the committed shareholders will continue to support the company. Financially they're very sound, so don't worry," chief financial officer Sam Cheung said on the call.
Agile has not said why Mr Chen was detained, but noted on Monday's call that three plots of land it bought in Yunnan province - part of a three billion yuan (S$620 million) investment - were acquired through "proper auctions". Kunming is the Yunnan provincial capital.
In a statement early last week, Agile said that online allegations linking the company with Zhou Yongkang, the country's former domestic security chief and the highest-profile figure caught up in Beijing's crackdown on corruption, were "entirely groundless and totally fabricated".
Agile's bond yields jumped last week amid the speculation as to why the company halted trading in its shares. Agile has over US$2 billion worth of bonds outstanding, and liquidity risks have been elevated since its first-half accounts showed short-term debt of 14.7 billion yuan was far in excess of the 1.3 billion yuan it had as a free-to-use cash balance on June 30.
The bonds now yield 15-20 per cent, up from 7-9 per cent a week ago, according to data from Tradeweb.
Agile's 8.25 per cent perpetual bond currently trades at 68/70 cents on the dollar, down from 84/85 over the week and 90 in August.
On Monday, Agile said the news of its chairman's detention had not impacted its business, and it recorded sales of more than two billion yuan during the Golden Week holiday period.
Helped in part by what came out of the analysts' call, Agile shares reversed some of their losses to close 17.2 per cent lower at HK$3.95. REUTERS
Chinese developer's shares fall as much as 31% after trading resumes; will consider other funding options
14 Oct5:50 AM
Hong Kong
CHINESE developer Agile Property Holdings Ltd, battling an industry slowdown and media speculation about ties to China's former security chief, said that it was in talks with banks about extending what remains of a US$475 million loan due in December.
Shares in the company, which is valued at around US$2.1 billion, dropped by as much as 31 per cent, the most on record, to HK$3.30 on Monday as they resumed trading after a week's halt. The company last week scrapped a proposed US$360 million rights issue - which would have gone towards repaying the loan - and said that its billionaire founder and chairman Chen Zhou Lin had been detained.
Agile said that Mr Chen - whose family wealth of US$3.2 billion was ranked 51st in China on the 2014 Hurun Rich list - had been required by the prosecutor in Kunming City in south-east China to stay at "a designated residence" since Sept 30.
Chinese property companies face tight credit and excess supply as growth in the world's second-largest economy slows. Weaker sales have choked liquidity at some property developers, pushing them to look for fresh sources of funding.
On a call with analysts on Monday, Agile said that it was in talks with banks including HSBC Holdings, Standard Chartered and Hang Seng Bank about extending the loan.
Agile, which is currently being run by Mr Chen's wife and another relative, said that it would consider other funding options including another try at a rights offer, other forms of equity financing or commercial property sales. "Shareholders' commitment will be ready within one or two days. So you can rest assured the committed shareholders will continue to support the company. Financially they're very sound, so don't worry," chief financial officer Sam Cheung said on the call.
Agile has not said why Mr Chen was detained, but noted on Monday's call that three plots of land it bought in Yunnan province - part of a three billion yuan (S$620 million) investment - were acquired through "proper auctions". Kunming is the Yunnan provincial capital.
In a statement early last week, Agile said that online allegations linking the company with Zhou Yongkang, the country's former domestic security chief and the highest-profile figure caught up in Beijing's crackdown on corruption, were "entirely groundless and totally fabricated".
Agile's bond yields jumped last week amid the speculation as to why the company halted trading in its shares. Agile has over US$2 billion worth of bonds outstanding, and liquidity risks have been elevated since its first-half accounts showed short-term debt of 14.7 billion yuan was far in excess of the 1.3 billion yuan it had as a free-to-use cash balance on June 30.
The bonds now yield 15-20 per cent, up from 7-9 per cent a week ago, according to data from Tradeweb.
Agile's 8.25 per cent perpetual bond currently trades at 68/70 cents on the dollar, down from 84/85 over the week and 90 in August.
On Monday, Agile said the news of its chairman's detention had not impacted its business, and it recorded sales of more than two billion yuan during the Golden Week holiday period.
Helped in part by what came out of the analysts' call, Agile shares reversed some of their losses to close 17.2 per cent lower at HK$3.95. REUTERS