Gemdale Group Says Recent WeChat Post About Co. Extending Non-Standard Debt is Incorrect, Says Property Management Subsidiary Is Creditor Instead of Debtor; Offshore Notes Drop by 6 Pts Today, Oct. 24

Mon 10/24/2022 06:16 AM

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Chinese property developer Gemdale Group said in a statement to investors Sunday, Oct. 23, that a WeChat blogger’s post over the weekend about the company extending its non-standard debt is incorrect, adding that its property management subsidiary Beijing Gemdale Gelin Property Management Co. Ltd. (北京金地格林物业管理有限公司) is a creditor, not debtor as the WeChat post indicated, according to two sources familiar with the matter.

The WeChat post claimed that Beijing Gemdale Gelin has extended some of its account receivable financing, citing a screenshot from Zhong Deng Wang, the registration and public notice system for chattel financing under the Credit Reference Center of the People’s Bank of China, the central bank.

In the statement Sunday, Gemdale explained that Beijing Gemdale Gelin Property Management Co. is the property management service provider to two developers, Beijing Jingyan Real Estate Co. and Beijing Beike Land Co., neither of which has any equity ties with Gemdale or its subsidiaries.

The developers are the sole debtors which had negotiated extension on certain supply chain financing with financial institutions, in which Beijing Gemdale Gelin was not involved, the company said in the statement.

While the developers promised to pay property management service fees to Beijing Gemdale Gelin via supply chain financing, Beijing Gemdale Gelin agreed to cooperate with the developers to conduct related financing procedures including the transfer and registration of accounts receivable on Zhong Deng Wang, according to the statement.

According to the supply chain financing agreement, Beijing Gemdale Gelin does not have any repayment obligation for the related financing, and that the borrower does not have any recourse right to Beijing Gemdale Gelin, the company added in its statement.

Gemdale Group’s $480 million 4.95% notes drop by six points to 31/36 today, Oct. 24, on general weak market sentiment and investors’ concerns about Gemdale’s financial standing resulting from the WeChat post.

Below is Gemdale Group’s capital structure:

Gemdale Group - Pro Forma as of 09/18/2022
	06/30/2022								EBITDA Multiple
(CNY in Millions)	Amount	Price	Mkt. Val.	US$ Amt.	US$ Mkt. Val.	Maturity	Rate	Yield	Book	Market

Secured Loan	91.0		91.0	13.0	13.0
Total Secured Loans	91.0		91.0	13.0	13.0				-x	-x
Lease Liabilities	1,258.6		1,258.6	180.3	180.3
Total Lease Liabilities	1,258.6		1,258.6	180.3	180.3				0.1x	0.1x
ABS issued in Oct 2020 - Phase 2 ¹	212.0		212.0	30.4	30.4	Sep-2030	4.600%
ABS issued in Mar 2020 - Phase 1 ¹	87.0		87.0	12.5	12.5	Feb-2029	4.500%
Jindi Senior 01 ²	1,150.0		1,150.0	164.8	164.8	Jul-17-2023	3.690%
17 Jindi 01 - 17 Jindi 08 ³	680.0		680.0	97.4	97.4
Jindi Senior 02 ⁴	750.0		750.0	107.4	107.4	Jan-18-2024	4.240%
Total Onshore ABSs	2,879.0		2,879.0	412.5	412.5				0.3x	0.3x
Credit Loan	75,376.9		75,376.9	10,799.0	10,799.0
Total Unsecured Loans	75,376.9		75,376.9	10,799.0	10,799.0				4.8x	4.8x
21 Jindi 04	500.0		500.0	71.6	71.6	Apr-07-2026	4.300%
21 Jindi 03 ⁵	2,495.0		2,495.0	357.4	357.4	Apr-07-2026	3.910%
21 Jindi 01 ⁶	2,000.0		2,000.0	286.5	286.5	Mar-01-2026	3.930%
20 Jindi 01 ⁷	3,000.0		3,000.0	429.8	429.8	Oct-12-2025	3.950%
20 Jindi MTN001B	500.0		500.0	71.6	71.6	Apr-03-2025	3.550%
22 Jindi MTN001 ⁸	1,700.0		1,700.0	243.6	243.6	Feb-23-2025	3.580%
21 Jindi MTN007	1,500.0		1,500.0	214.9	214.9	Dec-15-2024	4.040%
21 Jindi MTN006	1,500.0		1,500.0	214.9	214.9	Nov-10-2024	4.170%
17 Jindi 02	1,000.0		1,000.0	143.3	143.3	Jul-13-2024	5.050%
21 Jindi MTN005	1,500.0		1,500.0	214.9	214.9	Jun-15-2024	3.790%
21 Jindi MTN004	2,000.0		2,000.0	286.5	286.5	May-27-2024	3.720%
21 Jindi MTN003	1,500.0		1,500.0	214.9	214.9	Mar-24-2024	3.980%
16 Jindi 02	1,100.0		1,100.0	157.6	157.6	Mar-22-2024	3.500%
21 Jindi MTN002	1,500.0		1,500.0	214.9	214.9	Mar-10-2024	3.960%
21 Jindi MTN001	1,500.0		1,500.0	214.9	214.9	Jan-13-2024	3.880%
20 Jindi MTN004	2,000.0		2,000.0	286.5	286.5	Nov-12-2023	3.930%
20 Jindi MTN003	2,000.0		2,000.0	286.5	286.5	Aug-12-2023	3.830%
18 Jindi 07	996.5		996.5	142.8	142.8	Jul-18-2023	3.550%
18 Jindi 06	1,000.0		1,000.0	143.3	143.3	Jun-20-2023	5.700%
20 Jindi MTN002	2,000.0		2,000.0	286.5	286.5	Jun-05-2023	3.300%
18 Jindi 04	1,980.0		1,980.0	283.7	283.7	May-28-2023	5.380%
20 Jindi MTN001A	1,500.0		1,500.0	214.9	214.9	Apr-03-2023	3.050%
18 Jindi 01	2,990.0		2,990.0	428.4	428.4	Mar-19-2023	5.680%
18 Jindi MTN001	1,500.0		1,500.0	214.9	214.9	Jan-09-2023	5.900%
15 Jindi 01	2,725.9		2,725.9	390.5	390.5	Oct-15-2022	4.180%
17 Jindi 01 ⁹	-		-	-	-	Jul-13-2022	4.850%
17 Jindi MTN001 ¹⁰	-		-	-	-	Jul-05-2022	5.070%
Total Onshore Bonds	41,987.4		41,987.4	6,015.4	6,015.4				7.3x	7.3x
$480 Million 4.95% MTN Due Aug 2024 ¹¹	3,215.4		3,215.4	460.7	460.7	Aug-12-2024	4.950%
$200 Million 4.95% Notes Due Jul 2022 ¹²	-		-	-	-	Jul-26-2022	4.950%
$250 Million 5.6% Notes Due Jun 2022 ¹³	-		-	-	-	Jun-14-2022	5.600%
Total Offshore Notes	3,215.4		3,215.4	460.7	460.7				7.5x	7.5x
Total Debt	124,808.3		124,808.3	17,880.8	17,880.8				7.5x	7.5x
Less: Cash and Equivalents	(57,314.3)		(57,314.3)	(8,211.2)	(8,211.2)
Plus: Restricted Cash	1,356.2		1,356.2	194.3	194.3
Net Debt	68,850.2		68,850.2	9,863.9	9,863.9				4.1x	4.1x
Plus: Market Capitalization	52,989.0		52,989.0	7,591.5	7,591.5
Enterprise Value	121,839.2		121,839.2	17,455.5	17,455.5				7.3x	7.3x
Operating Metrics		US$ Amt.
LTM Reorg EBITDA	16,591.4	2,377.0

Liquidity
Plus: Cash and Equivalents	57,314.3	8,211.2
Less: Restricted Cash	(1,356.2)	(194.3)
Total Liquidity	55,958.1	8,016.9
Credit Metrics
Gross Leverage	7.5x
Net Leverage	4.1x
Notes: Source: Wind, Refinitiv, HKEx, Reorg; NCI: RMB 49.678 billion, Capital commitment: RMB 20.15 billion; Mortgage-related guarantee: RMB 5.43 billion, Guarantee to JVs and associates: RMB 2.386 billion; Potential off b/s onshore ABS guaranteed by Gemdale onshore holdco amounted to RMB 5.49B; Issuers incl. 深圳市前海一方恒融商业保理有限公司, 深圳市柏霖汇商业保理有限公司, 深圳前海联易融商业保理有限公司, 深圳市前海平裕商业保理有限公司 1. Assumed the RMB 33 million repayment indicated in 2021 annual report is evenly distributed across the two ABSs. 2. According to 2021 annual report, the Jindi Sub 01 issued in 2021 with a principal amount of RMB 61 million was subscribed by the company. 3. Rate: 3.75% to 4.25%; The aggregate amount of the 17 Jindi ABSs shown on Wind is RMB 1.3 billion, maturing from Sept. 14, 2018 to Sept. 12, 2025; According to 2021 annual report, the Jindi Sub issued in 2017 with a principal amount of RMB 100 million was subscribed by the company. 4. Issued on Jan. 18, 2022; According to 2021 annual report, the Jindi Sub 02 issued in 2022 with a principal amount of RMB 39 million was subscribed by the company 5. Puttable April 7, 2024 6. Puttable March 1, 2024 7. Puttable Oct. 12, 2023 8. Issued on Feb. 23, 2023 9. Repaid RMB 2.969B on July 13, 2022 10. Repaid RMB 1.5B on July 5, 2022 11. Issued by Gemdale Ever Prosperity Investment Ltd. 12. Repaid $200M on July 26, 2022; Issued by Gemdale Ever Prosperity Investment Ltd. 13. Repaid $250M on June 14, 2022; Issued by Gemdale Ever Prosperity Investment Ltd. Pro Forma: For Pro forma, the proceeds from the new bonds were added to cash as the exact use of proceeds for each of the bond raised remains unclear, undrawn credit facilities is adjusted accordingly; the repayment for matured debts were subtracted from cash as the exact source of funding used to repay the debt remains unclear US$ Translation: CNY/USD rate used for USD conversion is 6.98.

Gemdale Group Says Recent WeChat Post About Co. Extending Non-Standard Debt is Incorrect, Says Property Management Subsidiary Is Creditor Instead of Debtor; Offshore Notes Drop by 6 Pts Today, Oct. 24

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