Stocks and bonds of Suning crashed as fears on the company’s debt pile have increased. Granda Century’s (guaranteed by Suning Appliance) 7.5% 2021s bonds fell from 85.8 to a low of 67.6. They have recovered slightly today and trade at 72.1. Its shares have fallen over 10% this week and Bloomberg reports that they have lost over 70% of their value since 2015. FT reports that the Chinese retailer is one among several Chinese companies being keenly watched out for by investors in recent times with others such as Evergrande and China Huarong. Suning’s debt stood at more than $6.6bn at the end of Q3 last year as per S&P, with about 67% in short-term debt. Earlier this week, a Beijing court ordered a freeze on 540mn shares (5.8% stake) of its founder Zhang Jindong in the company for three years. Zhang holds a total 20.96% stake of Suning.com. According to William Ping, fund manager at Peaceful Investment Co., “The freezing of shares is being read as showing the hopelessness of Suning’s financials, not just what’s on books but off-balance sheet as well.” Suning.com said that its third largest shareholder Suning Appliance Group, may cut its stake from its current 13.98% by up to 4.12% in the next six-months.
In related news, Bloomberg reports that Suning Appliance’s creditors agreed to extend by two years a CNY 2.89bn ($451mn) bond that was to mature on Wednesday, a signal that the company may have otherwise struggled to repay it. Suning Appliance and its subsidiaries have $4.6bn in onshore and offshore bonds outstanding including a $600mn 7.5% bond due in September 2021.
Separately, Suning Appliance Group formally objected to a Beijing court’s plan to seize almost CNY 3.1bn ($485mn) in assets, after an unidentified firm filed a lawsuit against the holding company. The assets to be seized include those held by founder Zhang Jindong.
Granda Century’s (guaranteed by Suning Appliance) 7.5% 2021s bonds fell from 85.8 to a low of 67.6. They have recovered slightly today and trade at 72.1. Its shares have fallen over 10% this week and Bloomberg reports that they have lost over 70% of their value since 2015.
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