CIFI Holdings has agreed to promote a 60 per cent stake in 16 parcels of land in Sydney to an Australian firm for A$66.3 million (US$42.9 million), reserving an estimated lack of A$11.1 million within the course of, the distressed Chinese language developer stated.
That is the third time in two months that CIFI Holdings has revealed a plan to eliminate its property at a loss, because the developer continued to restructure its debt.
Zerlina Zeng, analyst at CreditSights, stated the divestment of the Sydney challenge confirmed the developer’s willingness to promote property at a loss to replenish liquidity, however it was means too early to conclude that CIFI has the willingness and talent to work out a debt restructuring plan with collectors.
“We count on CIFI’s liquidity situation to stay strained in 2024 with contracting contracted gross sales, restricted new funding from banks and the onshore bond markets, and difficulties in disposing its China funding/residential property property amid a chronic property downturn,” Zeng stated.
The corporate stated in its inventory trade submitting that it had been actively exploring alternatives for offshore asset disposal to ease the group’s offshore liquidity stress and to finance its enterprise operation.
Chinese language developer CIFI dumps property to maintain lights on amid darkening credit score outlook
Chinese language developer CIFI dumps property to maintain lights on amid darkening credit score outlook
Regardless of the loss, the Shanghai-headquartered developer stated the transaction “is just not anticipated to have instant materials affect on the monetary place of the group”. It additionally stated the properties didn’t generate any income in 2022 and 2023.
The asset contains of 16 adjoining plots of land on Berry Street, Holdsworth Avenue and River Street in St Leonards, a Sydney suburb a couple of 10-minute drive from town’s central enterprise district.
SH South St Leonards, an organization integrated in Australia, agreed to purchase the parcels of land topic to official approval, CIFI Holdings stated.
In December, CIFI Holdings stated it raised 436 million yuan (US$61 million) by promoting its 49 per cent stake in Tianjin Chuangda Actual Property Growth, struggling a lack of 28 million yuan.
In the identical month, CIFI subsidiary Liaochen Xuyin offered a majority stake in its Dezhou residential challenge in Shandong province at a lack of 215 million yuan.
CIFI’s woes started in late 2022, when it defaulted on a US$318 million offshore bond and terminated debt restructuring talks to collectors.
In March final yr, CIFI stated it was trying to promote its prime property in Shanghai, together with its headquarters, after a state-guaranteed 1.5 billion yuan bond difficulty didn’t materialise.
To resolve the liquidity disaster, CIFI chairman Lin Zhong and his household have put up 5 luxurious houses on the market in Hong Kong’s Southern district, at the same time as town’s property market continued to slip.
In its delayed earnings launch, the corporate stated it had swung to a 9 billion yuan loss within the first half of 2023 from a revenue of 1.9 billion yuan within the yr in the past interval. Its annual loss was 13 billion yuan in 2022. However the firm’s long-term liabilities shrank to 34.8 billion yuan by the top of June, from 41.3 billion yuan on the finish of 2022, whereas its working capital dropped to 30.6 billion yuan from 49 billion yuan in the identical interval, indicating balance-sheet downsizing.
