China Net Finance and Economics on January 20: The impact of this round of property market regulation on high-leverage housing enterprises is far from over, perhaps for some housing enterprises is just the beginning. On the last day of 2021, South China City announced the introduction of the Special Economic Zone C&D Group as its single major shareholder, successfully transforming itself into a "state-owned enterprise", perhaps this is only the tip of the overall debt problem of South China City.
Latest, according to the announcement issued by China South City Holdings Limited (hereinafter referred to as China South City, 1668.HK), the company is seeking the consent of the holders of the "11.50% Notes due February 2022" and the holders of the "10.875% Notes due June 2022" to amend and extend the above note deeds respectively.
Specifically, South China City proposes to extend the maturity date of the 11.50% Note by half a year from February 12, 2022 to August 12, 2022, and the maturity date of the 10.875% Note from June 26, 2022 to October 26, 2022.
At the same time, South China City said that the main purpose of the consent request is to extend the maturity date of the notes to improve the company's financial liquidity and cash flow management.
China Net Finance has learned that on December 15, 2021, the international rating agency S&P downgraded the long-term issuer credit rating of South China City from "B" to "B-". S&P also downgraded the long-term issuance of the company's outstanding U.S. dollar premium notes from "B-" to "CCC+." The "negative" outlook reflects S&P's expectation that if South China City fails to execute its plans in a timely manner, its liquidity will remain tight.
At that time, S&P believed that because the offshore capital market was already limited for most developers, the possibility of South China City issuing new offshore debt for refinancing was still very small, and the harsh industry environment also limited South China City's ability to replenish liquidity from sales inflows.
On 14 January, China South City announced that it recorded contracted sales of approximately HK$9,046 million and gross floor area of approximately HK$1,022,700 for the first three quarters of the financial year ended 31 December 2021 (from 1 April to 31 December 2021). Compared to the same period last year, contracted sales fell by about 25.2%.
This article originated from China Net Finance
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