Reorg’s Asia Core Credit Reports on Modern Land Bondholder Call

Our Asia Core Credit team dialed into a conference call Modern Land bondholders the company’s management, and reported that the company has identified more than 90% of holders of its $250 million due Oct. 25 notes for its proposed consent solicitation, and that the company’s cash on hand stood at a paltry $100 million.

Management of China-based property developer Modern Land told bondholders on a conference call today, Oct. 12, that the company has identified the holders of more than 90% in principal amount of the $250 million 12.85% senior notes due Oct. 25, 2021 for its proposed consent solicitation to extend the notes’ maturity by three months. Continue reading for more reporting on Modern Land’s proposed consent solicitation from our Asia Core Credit team, and request a trial to access reporting and analysis on stressed, distressed and performing credits in Asia.

Management said the company only has $100 million offshore cash and overall just RMB 450 million at holding company level. There is a cash shortfall due to a delay in the approval of an onshore loan but management expects to be able to redeem its next maturity, the $200 million 11.8% notes due Feb. 26, 2022, using operating cash and a shareholder loan. Modern Land has also suspended all land acquisitions in the fourth quarter in order to preserve cash and there are available channels for transferring funds from onshore to offshore, management added.

Modern Land’s chairman Zhang Peng is expected to provide a RMB 800 million ($124 million) interest-free shareholder loan within the next two to three months and the exact amount of the loan can increase if necessary according to management, who did not disclose the sources of funding for the loan, only saying Zhang is in the process of raising the remainder of the funds. Click through to read the full story.