Thu 10/07/2021 19:00 PM
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Hong Kong-listed property developer Yuzhou Group released a statement to investors on Thursday, Oct. 7, assuring them that the company does not have any hidden debt such as commercial bills or wealth management products, and that it has sufficient cash flow to cover debt maturities in 2022 and beyond.

As with many peers, Yuzhou has seen its offshore bonds being sold off over the last few days since Fantasia Holdings failed to repay its $206 million 7.375% notes upon maturity on Oct. 4. Yuzhou’s next maturity, $500 million 8.625% due Jan. 23, 2022s have dropped about 20 points since Monday, Oct. 4, to 74, and its longer-end, $645 million 7.375% due Jan. 13, 2026s were indicated at 50 on Thursday, down from 66 at the beginning of the week.

In the statement, Yuzhou said it is one of the few domestic real estate companies that never had any commercial bills or wealth management products, and its majority shareholders have not sold or pledged a single share since its listing.

Yuzhou has so far bought back a total of $45.5 million offshore bonds using cash on hand, and Chairman Lam Lung On has purchased an additional 8.3 million company shares in the open market in a bid to bolster prices.

The company said it will remain open about repurchasing bonds and shares in the public market through the company itself, its major shareholders or employees share award schemes in order to safeguard the interests of all investors, the statement said.

Yuzhou added that it does not have any onshore or offshore debt maturities for the remainder of 2021 after repaying RMB 2 billion domestic corporate bonds last week.

Contracted sales in September were in line with expectations, and the company has RMB 130 billion salable resources available in the second half of 2021, meaning it only needs to achieve a 45% sell-through rate to meet its full-year target.

Yuzhou said it will remain prudent with land acquisition, disclosing that it did not acquire any new land parcels in the third quarter. It also aims to lower the liability-to-asset ratio to below the required ceiling in order to be fully compliant with the government’s “three red lines” policy by the end of this year.

Below is Yuzhou's capital structure:
 
Yuzhou Group Holdings - Pro Forma as of 03/30/2021
 
12/31/2020
 
EBITDA Multiple
(CNY in Millions)
Amount
US$ Amt.
Maturity
Rate
Book
 
Bank Loans & Other Borrowings 1
19,042.4
2,929.6
 
 
 
Total Bank Loans & Other Borrowings
19,042.4
2,929.6
 
NM
20 Haitian 1A
750.0
115.4
Jul-14-2022
5.280%
 
20 Haitian 1C
53.0
8.2
Jul-14-2022
-
 
20 Haitian 1B
240.0
36.9
Jul-14-2022
6.000%
 
Total Onshore ABNs
1,043.0
160.5
 
NM
18 Yuzhou 04
800.0
123.1
Sep-25-2021
5.980%
 
18 Yuzhou 03
1,200.0
184.6
Sep-25-2021
5.980%
 
18 Yuzhou 01
1,000.0
153.8
Aug-29-2021
5.980%
 
19 Yuzhou 02
1,500.0
230.8
Apr-03-2024
7.500%
 
19 Yuzhou 01
2,000.0
307.7
Apr-03-2024
6.500%
 
20 Yuzhou 01
1,500.0
230.8
Jul-24-2025
6.500%
 
20 Yuzhou 02
1,500.0
230.8
Sep-15-2025
6.500%
 
Total Onshore Bonds
9,500.0
1,461.5
 
NM
$375M 6.375% USD Senior Bonds Due 2021
2,081.0
320.2
Apr-2021
6.375%
 
$352M 7.900% USD Senior Bonds Due 2021
2,288.0
352.0
Apr-2021
7.900%
 
$242M 8.625% USD Senior Bonds Due 2022
1,573.0
242.0
Dec-2021
8.625%
 
$350M 6.000% USD Senior Bonds Due 2022
2,275.0
350.0
Dec-2021
6.000%
 
$500M 8.500% USD Senior Bonds Due 2023
3,250.0
500.0
Jan-2023
8.500%
 
$400M 6.000% USD Senior Bonds Due 2023
2,600.0
400.0
Sep-2023
6.000%
 
$250M 6.000% USD Senior Bonds Due 2023
1,625.0
250.0
Sep-2023
6.000%
 
$500M 8.500% USD Senior Bonds Due 2024
3,250.0
500.0
Jan-2024
8.500%
 
$500M 8.375% USD Senior Bonds Due 2025
3,250.0
500.0
Sep-2024
8.375%
 
$400M 7.7% USD Senior Bonds Due 2025
2,600.0
400.0
Jan-2025
7.700%
 
$500M 8.300% USD Senior Bonds Due 2025
3,250.0
500.0
Apr-2025
8.300%
 
$400M 7.700% USD Senior Bonds Due 2025
2,600.0
400.0
Jan-2025
7.700%
 
$40M 7.500% USD Senior Bonds Due 2021
-
-
Dec-2020
7.500%
 
$645M 7.375% USD Senior Bonds Due 2026
4,192.0
644.9
Dec-2025
7.375%
 
$300M 7.875% USD Senior Bonds Due 2026
1,950.0
300.0
Jul-2026
7.875%
 
$562M 6.35% USD Senior Bonds Due 2027
3,653.0
562.0
Dec-2026
6.350%
 
Total Offshore Bonds
40,437.0
6,221.1
 
NM
$300M 5.375% Perpetual Notes
1,950.0
300.0
 
5.375%
 
Total Offshore Perpetuals
1,950.0
300.0
 
NM
Total Debt
71,972.4
11,072.7
 
NM
Less: Cash and Equivalents
(37,816.8)
(5,818.0)
 
Plus: Restricted Cash
2,743.2
422.0
 
Net Debt
36,898.8
5,676.7
 
NM
Operating Metrics
US$ Amt.
LTM Reorg EBITDA
(987.5)
(151.9)
 
 
Liquidity
Plus: Cash and Equivalents
37,816.8
5,818.0
 
Less: Restricted Cash
(2,743.2)
(422.0)
 
Total Liquidity
35,073.6
5,395.9
 
Credit Metrics
Gross Leverage
NM
 
Net Leverage
NM
 

Notes:
Sources: Company filings, Wind, Reorg
1. Excluding onshore ABNs issued by property management subsidiary
US$ Translation: CNY/USD rate used for USD conversion is 6.5.
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