An affiliate of Chinese state-backed developer Sino-Ocean (3377) is adding to a wave of debt extensions among Chinese builders by seeking to delay a coupon payment as liquidity worsens further in the real estate sector.

Sino-Ocean Capital is proposing to set back its interest payment to October instead of April for its 6 percent dollar notes maturing in October, a consent solicitation document shows.

The proposal would require approval from creditors holding at least 75 percent of the note’s outstanding value, the document says. Failure to obtain approval would mean a default event is likely to occur on May 9, the end of the 14-day grace period for the semi-annual interest payment originally due on April 25.

The development suggests weaker support from Sino-Ocean Group, China’s 24th largest builder by sales, which holds a 49 percent stake in Sino-Ocean Capital, and raises questions about the ability of the major shareholder to service its own debt.

Representatives of Sino-Ocean Capital have also told investors the company has engaged Haitong International (0665) to explore a number of options, including launching an exchange offer for its 6.25 percent notes due in June 2023, said two investors involved in the talks.

Sino-Ocean Capital is also facing a winding-up petition in Hong Kong filed by Great Wall International Investment VIII, and a court hearing has been scheduled for June 7.

https://www.thestandard.com.hk/section-news/section/2/252153/Developer-seeks-debt-extensions

Category: Hong Kong