Sino-Ocean expects to default, eyes alternative repayment arrangement

Chicago, July 25 – Sino-Ocean Group Holding Ltd. said that the bonds issued by subsidiary Sino-Ocean Holding Group (China) Ltd. will very likely not be repaid on Aug. 2, when due, according to an update.

The company intends to negotiate with the holders of the corporate bonds to adjust the repayment arrangement.

Specifically, the company will maintain communication with the holders of the corporate bonds, hold a meeting of the holders of the corporate bonds, negotiate a diversified debt resolution plan, and intends to protect and safeguard the legitimate rights and interests of its investors.

An online meeting will be convened from July 27 to July 29.

The company will be seeking consent to push the repayment period out an additional year.

The 4% interest will preferably remain unchanged.

The company suggests a repayment schedule of 10% repaid on Sept. 2, another 5% to be repaid each month in October, November, December, February and May and the remaining 65% on Aug. 2, 2024.

The company is also seeking a 15-day grace period on principal and interest repayments.

In return for the repayment arrangements, the company will add a credit enhancement and protection measures.

The company will provide a pledge guarantee with revenue rights attached to 50% equity interest in Beijing Yuanxin Real Estate Development Co., Ltd., a commercial complex in Beijing.

Sino-Ocean, knowing it has a liquidity problem, has been prioritizing the repayment of its public market debts. From 2022 through the first half of 2023, the company repaid RMB 20 billion in public market debt.

The company worked to enhance sales, accelerate cash collection, dispose of assets and control and reduce expenses.

However, property sales have still been contracting and the disposal of assets has become more difficult.

The property developer is based in Hong Kong.

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