Chinese Property Developers Sell Shares As Default Woes Deepen

Chinese property developers are stepping up efforts to raise cash through share placements and stake sales, as they look for ways to alleviate the historical liquidity squeeze. Surging yields in the offshore bond market have made it difficult for Chinese developers to refinance, and declining home sales have added to the gloom. Debt default woes at cash-strapped developers fuel investor concerns about the financial contagion. Evergrande Default ‘Highly Likely’ Evergrande announced on Nov. 18 it was selling its entire stake in the streaming platform firm HengTen at HK$1.28 apiece, a discount of 24 percent to its closing price on the prior day, and raised about $273 million. As its liquidity crisis deepened, Evergrande said that it will book a loss of $1.1 billion from the sale, according to its Hong Kong exchange filing (pdf). However, S&P Global Ratings said in a report the same day that a default is still “highly likely” for the …

Read More

RSS Feed | The Epoch Times