China’s Agile Group Dodging Debt Crisis With Sales of Stakes in Seven Projects

Agile Group is hanging for-sale signs on more of its assets, with nearly RMB 1.8 billion ($280 million) in new disposals announced since last Friday.

The cash-strapped Guangzhou builder is selling its shareholding in two under-construction residential projects in Xuzhou, in northwest Jiangsu province, and a third mixed-use project in Yiwu, in central Zhejiang province, to an existing partner in the projects, state-backed China Overseas Land & Investment (COLI), for a total consideration of RMB 1 billion, Agile said in a filing with the Hong Kong stock exchange.

Separately, Agile agreed to sell its stakes in five waste management and power generation firms based in Hebei and Shandong provinces for RMB 799.6 million to building materials provider China Conch Venture Holdings.

The disposals will provide Agile with immediate cash inflow and help meet its working capital requirements for the development of its other property projects, the top-20 mainland developer said Friday.

Countrywide Clearance

The project in Yiwu, a commodities hub about a three-hour drive south of Shanghai, has a site area of 43,820 square metres (471,675 square feet) and a construction floor area of 138,442 square metres.

Pre-sales of the residential and commercial properties at the Yiwu development are to begin next month, with building completion expected by October 2023.

One Xuzhou project has a site area of 53,949 square metres and a construction floor area of 173,651 square metres, while the other has a site area of 61,002 square metres and a construction floor area of 180,466 square metres.

The first project’s pre-sales of residential properties are to commence next month, with construction to be completed by April 2024, while the second project is expected to finish construction by the end of 2023.

The latest announcements come after COLI last week disclosed an agreement to buy out Agile’s and Shimao Group’s respective stakes of 26.66 and 26.67 percent in their Guangzhou development joint venture with the state-owned enterprise for a combined RMB 3.7 billion ($580 million). The JV’s principal asset is a mixed-use residential and commercial complex called Guangzhou Asian Games City.

Fantasia’s New Reality

Last weekend, Agile’s fellow troubled developer Fantasia Holdings agreed to sell a 41 percent stake in a company which holds a Chongqing project for RMB 200 million ($31.4 million). The buyer is a subsidiary of government-controlled developer Guangzhou Yuexiu Group, Fantasia said Saturday in an HKEX filing.

The company founded by Baby Zeng Jie, the niece of former vice president of China Zeng Qinghong, said the Chongqing disposal is one of the measures being implemented “to ease its liquidity issue”. The proceeds from the disposal will be used for general working capital and the repayment of debt.

Shenzhen-based Fantasia is in the midst of a debt restructuring guided by US firm Houlihan Lokey after missing various loan payments in 2021.

The group’s credibility took a hit last October when Fitch Ratings downgraded the developer over the late payments and shoddy book-keeping.