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Sunac China received 12 billion yuan in loans as state steps up support

Sunac China received 12 billion yuan in loans as state steps up support

FILE PHOTO: An advertisement of property developer Sunac China Holdings is seen at a residential complex in Shanghai, China March 25, 2018. Picture taken March 25, 2018. REUTERS/Stringer

BEIJING : A project of struggling property developer Sunac China received over 12 billion yuan ($1.69 billion) in loans from Chinese banks, asset management and trust firms, a source familiar with the matter told Reuters on Thursday, as the state steps up its support of the sector.

The Beijing-based group has been struggling to repay its creditors, and is undergoing a debt restructuring of all its onshore and offshore bonds according to sources, after defaulting on some dollar bonds and extending yuan bonds this year.

Beijing has stepped up support in recent weeks to free up a liquidity squeeze that has stifled the industry, which accounts for a quarter of the world's second largest economy and has been a key driver of growth.

Sunac China's Shanghai Dongjiadu project received financing from China Huarong Asset Management, six banks led by Shanghai Pudong Development Bank and CITIC Trust, the source said, adding that the funds were mainly used for the development, construction and operation of the project.

Sunac China did not respond to Reuters' requests for comment.

Analysts say this is the latest major bailout as Sunac China's Dongjiadu project, located in the heart of Shanghai's Huangpu district with residential and commercial space, has an unsold portion corresponding to a value of over 50 billion yuan.

Many cash-strapped Chinese developers have defaulted on debt obligations and have halted construction since a credit-crisis hit the sector last year after Beijing cracked down on a debt-fuelled building boom in the world's second-largest economy.

On Nov. 11 the central bank rolled out a rescue package and this week the securities regulator lifted a ban on listed property companies raising capital through equity offerings.

A growing list of Chinese developers have entered into or are preparing to kick-off debt restructuring talks with offshore bondholders after defaulting on payments.

Sunac China is now in talks with creditors to restructure all of its 14.6 billion yuan onshore bonds, three sources with knowledge of the matter told Reuters on Nov. 15.

($1 = 7.0875 Chinese yuan renminbi)

Source: Reuters


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