Embattled Chinese property developer Sino-Ocean Group Holdings is seeking a 12-month reprieve to redeem a local bond due next week, after some creditors filed a notice demanding full repayment.
The state-backed developer offered to repay a 2 billion yuan bond ($280 million) due on August 2 in instalments spread over 12 months, at the same 4% annual coupon, according to a filing to the Hong Kong Stock Exchange. The company also sought to insert a 15-day grace period on each of the future repayment dates.
Through the bond trustee, a group of creditors holding more than 10% of the onshore bond has demanded that Sino-Ocean honour its obligation on August 2, according to the filing.
The developer will convene a meeting of creditors from July 27 to 29 to discuss its repayment proposal, according to the filing.
Sino-Ocean sold the 2 billion yuan 4% five-year bond in 2018. Under its proposal, it will pay 10% of the principal on September 2, and 5% each in October, November, December this year, and in February and March 2024. The final 65% will be paid on August 2 next year.
As a sweetener, Sino-Ocean said it would pledge the rights to 50% of the revenue generated by its unit Beijing Yuanxin Real Estate Development, which owns and operates the Grand Canal Place commercial complex in the nation’s capital.
The developer had 97 billion yuan of borrowings on December 31, 2022, according to its annual report. They included 53.6 billion yuan in bonds, asset-backed securities and trust loans. Almost 40% of its total borrowings were due within 12 months.
