China Weighs Breakup; Property Stocks Slide: Evergrande Update
Read all the latest developments and updates from the Evergrande crisis here.
(Bloomberg) -- Chinese authorities are considering a proposal to break up China Evergrande Group by selling the bulk of its assets, according to people familiar with the matter. Developer stocks slumped after two firms announced plans to issue fresh equity.
Evergrande’s restructuring proposal calls for the developer to sell most assets except for its separately listed property-management and electric-vehicle units. The builder has told creditors it aims to issue a preliminary restructuring plan in the next six months and intends to treat all categories of bondholders equally, people familiar with the matter have said. U.S. investment firm Oaktree Capital is moving to seize a plot of land used as collateral by Evergrande, the Financial Times reported.
A Bloomberg Intelligence index of real-estate stocks slid as much as 4.9% on Thursday, with record declines for Times China Holdings Ltd. after it placed new shares in Hong Kong and Logan Group Co., which sold equity-linked securities to refinance existing debt. Evergrande fell 4%, while prices in China’s high-yield dollar bond market fell for the first time in more than a week.
Key Developments:
- China Is Said to Weigh Breaking Up Evergrande to Contain Crisis
- A Dismantling of Evergrande Could Be Positive: Credit React
- Sino-Ocean’s Additional Issuance Signals Access: Credit React
- Logan Shares See Record Drop After Equity-Linked Securities Plan
- Logan’s New Issuance, Guarantee Stir Cash Flow Concerns: React
- Housing Crackdown Weighs Down China’s Economy as the Year Starts
- Oaktree Capital Seizes Evergrande Property Asset: FT
- Property Crisis Means Chinese Cities Sell Land to Themselves
- Shimao’s $74 Million Placement Limit a Hurdle to Cash-Crunch Fix
State-Owned Cos. Bid for Kaisa Projects: Yicai (6:22 a.m. NY)
Some state-owned enterprises bid for Kaisa Group’s property projects in Shenzhen, China Business News reports, citing unidentified people.
The deal may be completed after the Chinese New Year holiday, according to the report, which didn’t give a timetable or name any buyers.
S&P Signals Logan’s Rating May Be Cut (6:22 p.m. HK)
S&P indicated it may be ready to lower Logan Group’s credit rating, citing “previously unreported debt guarantees.”
The rating company placed its ‘BB’ long-term issuer credit rating on Logan and ‘BB-’ long-term issue rating on its outstanding senior unsecured notes on CreditWatch with negative implications, according to a statement.
“If the previously unreported debt is confirmed, Logan’s credit profile and liquidity may be hit,” S&P said, adding more information is required to analyze the extent of such debt.
Sino Ocean’s New Green Notes (3:34 p.m. HK)
Sino-Ocean Group Holding Ltd. plans to issue green bonds to add to its existing tranche due 2025, according to an exchange filing. Proceeds will be be used to repay debt due within 12 months. Sino-Ocean is part controlled by Chinese state entities. Click here for details on pricing.
China Said to Weigh Evergrande Breakup (12:54 p.m. HK)
China is considering a restructuring proposal for Evergrande under which most of its assets would be sold, according to people who asked not to be identified discussing a private matter.
A group led by China Cinda Asset Management Co., a state-owned bad debt manager and major Evergrande creditor, would take over any unsold property assets, they said. Asset-sale proceeds would go toward repaying creditors, although it’s unclear what kind of haircuts banks and bondholders would have to take.
Logan Raises Funds (8:26 a.m. HK)
Logan sold HK$1.95 billion ($250 million) of equity-linked securities and said it will use the net proceeds for refinancing its existing debt. The securities, payable semi-annually, will mature on Aug. 4, 2026, unless there is earlier redemption.
Times China Equity Placement (8:17 a.m. HK)
Times China is selling 117.7 million new shares at HK$3.40 apiece, according to a Hong Kong stock exchange statement. The price represents a discount of 17.1% to the stock’s closing price on Wednesday.
Oaktree Seizes Evergrande Assets, FT Says (2:44 a.m. HK)
Oaktree Capital has moved to seize a plot in Hong Kong after Evergrande defaulted on a loan against which Oaktree had security, according to the Financial Times report, which cited people familiar with the matter. Evergrande had planned to use the asset as collateral when restructuring its offshore debt, the report said.
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