Chinese developers’ shares slumped Thursday after two firms announced plans to issue fresh equity. U.S. investment firm Oaktree Capital is moving to seize a plot of land used as collateral by China Evergrande Group, the Financial Times reported.
The builder has told creditors it aims to issue a preliminary restructuring plan in the next six months. Evergrande said in a statement Wednesday after holding a telephone conference with stakeholders it “will continue to listen carefully to the opinions and suggestions of the creditors.” The firm plans to treat all categories of bondholders equally, such as onshore and offshore investors, with help from its financial advisers, a company executive said on the call, according to people familiar with the matter.
Other stressed real estate firms are accelerating their fundraising efforts ahead of the Lunar New Year holiday. China Aoyuan Group Ltd. — which changed its auditor ahead of a key earnings season for the industry — completed a property sale in Canada, Times China Holdings Ltd. placed new shares in Hong Kong and Logan Group Co. sold equity-linked securities to refinance existing debt.
Evergrande shares slumped as much as 9.6%, while Times China and Logan had record daily drops of 32% and 17%. A Bloomberg Intelligence index of real-estate stocks slid 4.6%.
Key Developments:
Evergrande Aims to Present Restructuring Plan in Six Months
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
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.
China Aoyuan to Sell Properties in Canada (11:15 p.m. HK)
China Aoyuan agreed to sell properties in Canada to Anthem Properties Group for C$215 million ($169 million), according to a filing. Aoyuan also said Deloitte has resigned as an auditor for the company, effective Jan. 25, due to a dispute over audit fees.
Evergrande Aims for Restructuring Plan in Six Months (9:35 p.m. HK)
Evergrande reiterated its position that it will “evaluate the conditions of the Group with a view of formulating a restructuring plan for the protection of the rights of the stakeholders,” according to a filing following a call with creditors.
The property company is procuring an auditor to carry out relevant work “and will continue to listen carefully to the opinions and suggestions of the creditors,” it said.
China Resources Land Gets M&A Financing (6:25 p.m HK)
China Resources Land Ltd. said China Merchants Bank Co. will offer 23 billion yuan ($3.6 billion) of financing quota for the developer’s mergers and acquisition businesses, according to a company statement on WeChat account.