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Modern Land (China) Co, a small developer, said it is seeking investor consent to extend the maturity date of a dollar bond due October 25 by three months to avoid a default of payment.
The chairman and chairman of Modern Land also intended to grant the company shareholder loans totaling 800 million yuan ($ 124.35 million), which are expected to be completed within two to three months. coming months, the company said in separate documents.
Actions taken by the two companies highlight the fallout from China Evergrande, struggling with debt of less than $ 305 billion, to the rest of the high-yield sector hit by tight liquidity and slowing sales .
Fantasia Group China Co, controlled by Fantasia Holdings, said in a filing that its obligations will now only change hands through negotiations, after a downgrade of China Chengxin International Credit Rating Co (CCXI).
Previously, they traded on an auction system on the Shanghai Stock Exchange.
Two Fantasia Group bonds were suspended from trading on the exchange on Friday following a collapse, after Fantasia Holdings missed the deadline for a $ 206 million international debt payment on October 4. .
Traders said changes made to the trading mechanism by Chinese issuers – often before their bond defaults – are likely aimed at limiting participation and curbing volatility.
Cai Hongfei, real estate analyst at Central Wealth Securities, said the changes may reflect a desire to protect investors as many Chinese developers face an uncertain future.
For many Chinese non-state developers, the goal is to survive for the next three months, he said. “Asking about their repayment plan in 6 to 12 months is a question they just can’t answer.”
Hengda Real Estate Group Co Ltd, Evergrande’s flagship unit, has also adjusted the way its onshore bonds are traded, moving from auctions to deals traded since mid-September.
Fantasia Holdings said in a Hong Kong filing Friday that it had appointed Houlihan Lokey and Sidley Austin as advisers to assess its capital structure, assess liquidity and explore solutions to alleviate its current liquidity problem.
Fantasia Group added in Monday’s statement that the group plans to improve its short-term repayment capacity by selling assets.
Fantasia Holdings chairman Pan Jun told a forum last month that if real estate policies remain tight until next June, 60% of private developers could collapse due to poor sales.
Most Evergrande and Fantasia bonds have already lost around 80% of their value.
Modern Land bonds with a 12.85% coupon due later this month fell to 46.512 cents on the dollar on Monday. Its shares in Hong Kong closed down 2.11% at HK $ 0.465, the lowest on record.
The developer also offered to repurchase 35% of the principal amount and pay a consent fee of $ 1.00 for every $ 1,000 to holders.
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