Yango Group (000671.SZ) another Chinese real estate developer struggling with liquidity and asked its lenders of asset backed securities on Friday not to expect payment for a year, reported by Redd according to Reuters.
On Monday following earlier development, the company offered to swap some of its U.S. dollar bonds for notes personally guaranteed by its chairman in a desperate attempt to avoid default.
According to an exchange filling in the Hong Kong bourse, Yango is offering $25 in cash and $1000 in new notes for each $1000 of existing bonds swapped. The filing further notes the offer applied to U.S. dollar notes due on February 2023, January 2022 and March 2022.
The company also reportedly negotiating with debtholders to change terms of five other outstanding dollar bonds, as reported by Reuters.
Shares traded in the Shenzhen Exchange dipped as low as 7.45% with fear of contagion coming to a reality. The CSI300 real estate sub-index slipped 1.6%, according to Reuters.
New bonds being offered in a swap offer are personally guaranteed by its chairman and founder Lin Tengjiao. The filling also read, “overall efforts to improve our liquidity, preserve options to stabilize our operations as a going concern, and avoid imminent payment defaults and potential holistic restructurings of our debts and business operations,”.
According to Reed financial intelligence as reported by Reuters, on Friday the company in a closed-door meeting requested its investors to refrain from seeking payment for a year on Friday. No bondholders however approved the plan.
The company’s asset backed securities of 1.27 billion yuan at 6.5% to mature on November 2022. Holders of the security has the option to demand payment next month.