Shares of Chinese developer Modern Land plunged nearly 40% to all-time lows on resumption of trade on Monday after it said it has been in talks with noteholders on a restructuring plan for its $1.3 billion of offshore bonds.
Modern Land said in a filing on Monday it has received notices from certain noteholders demanding early repayment of their senior notes, after the firm missed payment for its 12.85% notes due October 25, 2021.
The shares, which have been suspended since October 21, sank nearly 40% in Asia opening hours to HK$0.23, a historical low.
The developer said it has been in discussion with these creditors for a waiver and it has appointed financial advisers to formulate an overall plan for feasible remediation actions.
Unprecedented Liquidity Squeeze
Chinese developers are facing an unprecedented liquidity squeeze due to years of regulatory curbs on borrowing, leading to a string of offshore debt defaults, credit-rating downgrades and sell-offs in developers’ shares and bonds.
China Evergrande Group, the world’s most indebted developer with more than $300 billion in liabilities, is seeking a six-month delay in the redemption and coupon payments of a 4.5 billion yuan ($157 million) bond in a meeting with bond holders. The outcome of the meeting is expected later on Monday.
Separately, smaller peer Shimao Group Holdings, which defaulted on a trust loan last week, has put on sale all of its real estate projects, including both residential and commercial properties, Caixin reported.
The Shanghai-based property developer has struck a preliminary deal with a Chinese state-owned company to sell its Shimao International Plaza Shanghai, a commercial property on Shanghai’s Nanjing Road, for more than 10 billion yuan, the report said.
The company didn’t immediately respond to a request for comment.
As of 0207 GMT, shares of Evergrande fell 2.8%, while Shimao gained 5.3%.
- Reuters with additional editing by Jim Pollard