Chinese Developer Modern Land Asks to Delay Bond Repayment

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Property firm seeks three-month extension for outstanding loans

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Restrictions on loans to the sector have helped create a crisis in Evergrande and have put pressure on developers’ stocks and bonds more broadly. A default by Fantasia Holdings Group last week Co.

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The bond-market sell-off intensified on the $206 million dollar bond.

Shares of Modern Land have fallen more than 40% this year. Its dollar bond fell to 25 cents on the dollar last Friday, down from 72 cents at the end of September, according to TradeWeb, due in March 2024.

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On Monday, Modern Land said it intends to delay repaying by three months the $250 million of a 12.85% bond due on October 25, though it plans to buy back 35% of the bond at its original maturity date.

The delay is aimed at improving liquidity, managing cash flow and “avoiding any possible default under the notes”, Modern Land said. It is offering investors $1 in the face value of the bond for every $1,000 they hold as a fee for agreeing to the changes. It needs to get at least 90% approval.

In a separate statement, Modern Land said its controlling shareholders, Chairman Zhang Lei and President Zhang Peng, will provide a total of 800 million yuan, the equivalent of about $124 million, in shareholders’ debt within the next two to three months. The statement touted Zhang Lei’s “continued commitment to the Group and his unwavering belief in the Group’s businesses and development”.

Last week, Modern Land said its contracted sales for September of properties and car-parking spaces were worth about 3.56 billion yuan, or about $553 million. This was about 22% lower than the year-ago period.

PR Venkat at [email protected]sshala.com

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