Joseph Lau’s Chinese Estates has seen its bets turn bad this year
In today’s roundup of regional news headlines, the family of billionaire Joseph Lau cuts its losses with the liquidation of its position in bonds issued by developer Kaisa Group, which is reportedly seeking buyers for Kaisa Prosperity Holdings, the group’s property management unit. China Evergrande, meanwhile, avoids default for the second time in a week after paying an overdue offshore bond coupon in the nick of time.
Chinese Estates’ Lau Loses $174M in Property Bond Fire Sale
The Hong Kong real estate firm run by the family of billionaire Joseph Lau liquidated its position in Kaisa Group Holdings bonds at a loss, contributing to a sell-off that has stoked worries about credit-market contagion in the Chinese property sector.
Lau’s Chinese Estates Holdings sold the last of its Kaisa bonds this week for about $27 million and will record an aggregate loss of $174 million on its position this year, according to a Hong Kong exchange filing. Read more>>
Kaisa Plans to Sell Property Management Unit, Hong Kong Sites
Kaisa Group Holdings is seeking buyers for its Hong Kong-listed property management unit and two residential sites in the city, people with knowledge of the matter said, as it scrambles to meet a wall of debt repayments.
Kaisa plans to sell its entire 67.18 percent stake in Kaisa Prosperity Holdings, a company with a market value of around HK$2.4 billion ($310 million), two sources said. Read more>>
Evergrande Pays $45.2M Overdue Bond Coupon to Avoid Default
China Evergrande Group has staved off a potential default for the second time in a week, after paying an overdue offshore bond coupon before a 30-day grace period runs out.
The Shenzhen-based developer paid $45.2 million of coupon due on its 9.5 percent, $951 million bond that matures on 29 March 2024, according to people familiar with the matter. Evergrande missed the payment on 29 September and was given 30 days to comply before bondholders are entitled to declare it in default, a move that could trigger cross defaults across all its offshore debt — and in the worst case set the stage for creditors to petition for its liquidation. Read more>>
China’s Sunac Sold $554M in Beike Shares
Real estate developer Sunac China Holdings gained about $554 million between June and this month by selling assets, including its first stake reduction in the operator of real estate agency Lianjia, to improve its financial health.
The proceeds of the transactions should generate working capital for Sunac, the Beijing-based company said. Read more>>
China Developers Propose Offshore Debt Restructuring
Some Chinese property developers have voiced their intention to the regulators to extend their offshore bond maturities or undertake a debt restructuring, two sources with knowledge of the matter said, as a growing number of defaults hits the sector.
The developers proposed the ideas at a meeting jointly held by the National Development and Reform Commission and the State Administration for Foreign Exchange on Tuesday, the sources said. Read more>>
Luckin Coffee in $175M Settlement Over Accounting Fraud
Luckin Coffee reached a $175 million settlement of shareholder class-action claims that the Chinese rival to Starbucks fraudulently inflated its share price by falsifying revenue.
Lawyers for the shareholders called the all-cash settlement, filed on Monday night, an “excellent result”, citing Luckin’s liquidation proceeding in the Cayman Islands and its related filing for protection under the US Bankruptcy Code. Read more>>
MTR Land Sale in Tung Chung Draws 5 Bids
A major sale of residential land in Hong Kong drew a tepid response from developers, as six of the seven companies that showed interest last month recoiled at the investments needed, in a possible shift in priorities amid the government’s plan to build a Northern Metropolis near the city’s border with Shenzhen.
A plot in Tung Chung on Lantau Island, where the city’s Disneyland resort and airport are located, received at least five bids, far fewer than the 35 expressions of interest, according to developers who responded to queries by the South China Morning Post. MTR Corporation, the city’s subway operator and land owner, had not announced the number of bids as of 6pm. Read more>>
Chinese Cities Ease Policies to Prop Up Housing Sales
Embattled Chinese property developers can heave a sigh of relief as authorities at the city, provincial and central government level take steps to ease policies to boost the flagging housing market.
Housing authorities in Yiwu in the eastern province of Zhejiang said last week that developers can restart presale activity as soon as they launch a residential project, reversing their decision in August, when developers had to apply for presale permits in tranches once every three months. Read more>>
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