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China Aoyuan reached a debt restructuring agreement with its creditors. It now has to garner a 75% approval rate from its creditors to be able to go through the agreement. Currently the approval rate stands at 33.01%. The restructuring includes debt-to-equity swaps and the issuance of new financing tools to replace the original bonds China Aoyuan will issue:
It plans to issue the new bonds through its subsidiary, Add Hero Holdings Limited. Aoyuan’s shares continue to remain suspended from trading on the exchange. If the restructuring gets approved, its net debt ratio is expected to decrease from its current 80.7%. Aoyuan further provided a business update noting that over 90% of its real estate projects were progressing according to schedule.
The developer also released financial results for 2022 and 2021. It reported a loss of RMB 7.84bn ($1.1bn) for 2022 and a loss of RMB 33.07bn ($4.6bn) in 2021. That compares with a profit of RMB 5.91bn ($820mn) in 2020.
Aoyuan’s dollar bonds are trading at deeply distressed levels of 5-6 cents on the dollar.
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