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Shares in A-Living Smart City Services plunged by as much as 17.2% before closing down 12.2% at HK$7.33 on Thursday after its parent firm, indebted Chinese developer Agile Group Holdings, said it will sell some equity in the property management unit at a 16% discount on Thursday’s closing price to raise funds needed to pay off looming debts due this year.
Agile will sell a 3.45% stake in A-Living Smart City at a price of HK$7.01 apiece to raise HK$550 million ($70 million), the developer said.
It will also secure a further HK$207 million ($26.4 million) in the form of loans from Gongqingcheng A-Living Investment Management, a firm owned by Agile employees. Gongqingcheng A-Living will sell some of its holdings in A-Living Smart City and offer the funds raised to Agile as loans. Agile will still hold a 50.9% stake in the unit after the transactions.
The proceeds will be used to boost liquidity, and pay off some maturing debts, the company said. Agile has a $400 million bond coming due at the end of August and 1.5 billion yuan in private bonds and 1 billion yuan of asset-backed securities that will expire in October, according to Wind Information.
Agile has been busy disposing of assets and actively fundraising to drum up cash amid a tight financing environment and as a cooling real estate market compounded by a string of Covid-19 outbreaks hammer sales.
