Sino-Ocean Group, a major real estate developer in China, has made the decision to suspend trading of its U.S. dollar-denominated securities due to the ongoing challenges facing the country's real estate market. This move comes as the company faces difficulties in meeting its debt obligations.
In light of the current tight liquidity position, Sino-Ocean has taken the step to suspend payments on all offshore debts until comprehensive restructuring and extension solutions can be put into place. The company aims to actively engage in negotiations with relevant stakeholders such as banks, noteholders, and financial institutions to explore options for extending the maturity or restructuring the offshore debts.
The struggles faced by Sino-Ocean are not unique, as many Chinese property developers are grappling with similar issues. A combination of a slowing economy, increased finance costs, and weak consumer sentiment has adversely affected property sales and made it challenging for developers to fulfill their debt commitments.
Sino-Ocean highlights that since 2023, it has experienced a significant decline in contracted sales and increased uncertainty in asset disposals, leading to limitations in various financing activities. It is clear that without notable improvements in the industry sales and financing environment, these challenges will persist.
As of now, trading in the eight offshore bonds issued by Sino-Ocean will be temporarily suspended on the Hong Kong stock exchange. These bonds are set to mature between 2024 and 2030.
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