Thursday 24 January 2019

Chinese developer Oceanwide mulls sale of properties

Oceanwide is based in Beijing
Oceanwide is based in Beijing

Bloomberg News

Chinese property developer Oceanwide Holdings is exploring the sale of its residential projects in Beijing, according to people familiar with the matter, as the company seeks to raise money before a looming deadline to repay debt.

The Beijing-based developer is also planning to accelerate residential sales to individuals in Shanghai and Wuhan, said the people, who asked not to be identified because they're not authorised to speak publicly. Oceanwide disclosed part of the sale plans on an investor call, when it also said it will consider exchanging its $600m (€512m) bonds with new notes, people with knowledge of the event said.

The news sent Oceanwide's 7.75pc bond, due in 2020, plunging to a record low, according to Bloomberg data. The company's shares fell for a second day in Shenzhen trading last Friday, and are down 12pc since resuming from a three-month trading halt in mid-April.

Some Chinese developers are coming under a cash squeeze amid a deleveraging drive by regulators and curbs on the property market. A gauge tracking developers listed in Shanghai fell to its lowest since January 2017 last week as concerns intensified that regulators will take further steps to cool the housing market.

Borrowing costs for developers have surged amid a wave of defaults in China and a growing supply of bond issuance offshore. Concerns about the ability to repay debt took a toll on developer Wuzhou International Holdings last week, leading to an 85pc stock plunge.

Oceanwide's public relations department didn't answer questions on any possible sale of residential projects in Beijing, saying in an emailed reply that the company is still in talks with regulators to secure licences that would allow the firm to sell homes to individuals. It is making efforts to get such licences for Shanghai and Wuhan projects faster to accelerate sales, the firm said.

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