Jakarta –
The property crisis in China is not over yet. After Country Garden and Evergrande, property developers who failed their debts, now Redsun Properties Group has the same fate. The company’s debt condition is getting worse.
Quoted from SCMP, Monday (19/2/2024), Redsun was reported to have experienced default on several foreign debt securities since mid-2022. Several companies holding their receivables finally issued a lawsuit petition against Redsun for failing to pay the debt.
The Bank of New York Mellon (London branch) has filed a petition against Redsun for failing to pay a debt of at least US$ 228.5 million (Rp. 3.54 trillion). The debt is the principal amount of US$ 200 million which matures in September 2023 plus interest.
The lawsuit was published on February 14 in Hong Kong. The trial date for the lawsuit is unknown.
Meanwhile, Redsun said they were seeking legal advice regarding this matter.
The legal proceedings highlight the collapse of the development company based in Nanjing in eastern Jiangsu province, which only registered in Hong Kong less than six years ago. It also shows how some foreign creditors are losing patience with many Chinese developers as home sales slumped after a liquidity crisis triggered by Beijing’s “three red lines” policy, and then exacerbated by the Covid-19 pandemic.
The same Hong Kong court last month granted a winding-up order against Evergrande Group after it failed to reorganize around US$20 billion in foreign debt. The Evergrande case is said to be the largest corporate collapse among entities listed on the Hong Kong stock exchange, based on its total debt obligations of US$ 337 billion.
Since the last payment of its overseas bonds in April 2022, Redsun has failed to repay some of its US$1.5 billion dollar bonds, including in April and September last year. They hired Haitong International Securities and Linklaters as external advisors in August 2022 to deal with creditors.
“No hearing was conducted in relation to the petition and no winding-up order was made by the High Court against the company,” the developer said in a filing today. Redsun said it had communicated with several bondholders to find a solution.
Zeng Huansha, the company’s chairman and controlling shareholder, is also under pressure. A creditor, Serica Agency Limited, has also filed a petition to seize his private investment vehicle for failing to repay bonds worth US$275 million, according to an exchange filing last month.
Evergrande’s meltdown has opened the door to more closed petitions against indebted developers, said independent market analyst Louis Tse Ming-kwong. “Several banks are among the creditors, and they are also registered,” he said. “What else can they do but seek help from the courts?”
Logan Group, which faces trial on Friday, had better luck. The High Court dismissed creditors’ petition to liquidate the group’s two main units. A group of bondholders who initially submitted the petition plans to withdraw its action, after being satisfied with the Shenzhen-based company’s restructuring proposal.
Watch the video “Financial Planner: It’s Better to Pay Down Your House for 30 Years Instead of Renting”
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2024-02-19 01:26:59
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