It’s a mess! Another Chinese Property Failed: Modern Land

Jakarta, CNBC Indonesia – Previously, several large, medium and small-scale Chinese property developers were unable to pay off debt bond coupons to investors. Now the list of property companies in China that have failed to pay has increased by one more.

Previously Evergrande Group, Fantasia Holdings and Sinic Holdings were rumored to have missed coupon payers, now it’s Modern Land’s turn to suffer the same fate.

Reuters reported that the Hong Kong exchange-traded company code 1107 had missed bond payments, adding to concerns about the wider impact of China’s Evergrande debt crisis and dragging down property stocks on the Hong Kong Exchange.

Last week Modern Land had actually said it would cancel the bond interest payments and said it would repay part of the bonds worth US$ 250 million or equivalent to Rp 3.62 trillion (exchange rate of Rp 14,300/US$) which matured on Monday, October 25 at a rate of Rp. extend the deadline by up to three months.

China’s state authorities are said to be meeting property companies with large dollar-denominated debts to see their repayment capacity, amid growing concerns about liquidity.

Modern Land (China) Co Ltd said in a filing on Tuesday (19/10) that it had not paid principal and interest on the 12.85% senior bond maturing on Monday due to “unexpected liquidity issues”.

Earlier this month, Fantasia Holdings Group 1777.HK defaulted on maturing dollar bonds, raising concerns in international debt markets already rocked by concerns over whether Evergrande will meet its obligations.

Evergrande, who managed to evade default last week after securing $83.5 million in interest payments at the last minute of the grace period (grace period) 30 days after missing the payment schedule, still haunted by other obligations that are already in sight.

Reported by Reiters, Friday this week Evergrande again had to pay US $ 47.5 million and a total of other overseas coupon payments of US $ 338 million will be due in November and December.

In the capital market, property developer shares again experienced a correction in trading this Monday (26/10).

Apart from the effects of the property crisis, concerns over China’s plans to introduce a real estate tax are also a major concern.

China’s China Real Estate Index fell 2.7%, while the Hang Seng Mainland Properties Index fell nearly 5.1%. The Hang Seng Index also shed 0.6% while China’s CSI300 index fell 0.3%.

The prospect of contagion and increasing defaults has weighed on the sector with many investors opting to step back.

Chinese Estates Holdings Ltd said it would post a loss of HK$288.37 million ($2.24 billion) in the current fiscal year from the sale of the latest bonds issued by Chinese property developer Kaisa Group Holdings Ltd.

Modern Land’s 11.8% February 2022 bonds are down 1.6% at a discount of more than 80% of their face value, according to Duration Finance data.

China Evergrande shares fell 7.1%, while the group’s electric vehicle (EV) unit fell 5.5% after rising 5.8% earlier as the property developer said it would prioritize growth in its EV business.

[Gambas:Video CNBC]

(fsd/fsd)



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