SHANGHAI/HONG KONG (Reuters) – Chinese developer Guangzhou R&F Properties said on Wednesday it was seeking to extend the maturity of its $725 million dollar bond due January by six months.
The developer also proposed two options under a tender offer started on Wednesday: buying back the notes at a 17% discount, or $830 for every $1,000 in principal; or buying back at most half of a bondholder’s notes in full, both with accrued interest.
R&F said in a filing that if the proposals failed to be implemented, the firm might not be able to fully redeem the notes upon maturity on Jan. 13.
China’s property sector has been under liquidity pressure in the past few months after an unprecedented credit tightening in the country, causing a string of defaults and rating downgrades.
R&F’s plans are part of efforts to improve its overall financial condition, it said, adding it may set a maximum acceptance amount for both options of the cash offer.
The bond in question dropped to 72.833 cents on the dollar in the evening, compared with 79 cents a day earlier, according to data from Duration Finance.
An R&F April 2022 yuan-denominated exchange-traded bond plunged in the afternoon following the proposals, prompting a temporary suspension, the Shanghai Stock Exchange said, citing “abnormal fluctuations.”
Exchange data showed the bond fell nearly 23% to around 46 yuan before it was suspended.
Trading in an onshore bond of Shimao Group saw halts for the third consecutive day on Wednesday after its price tumbled.
Sharp falls in Shimao’s shares and debt this week were triggered by worries over an asset sale and cancelled apartment deals.
Shares of R&F and Shimao in Hong Kong closed down 3% and 2.5%, respectively.
(Reporting by Andrew Galbraith and Clare Jim; Editing by Shri Navaratnam and Mark Potter)
