China developer Sunac raises US$953m in share sale combo
Hong Kong
SUNAC China Holdings raised US$953 million through the sale of new shares, as well as a stake in its property management unit, the latest Chinese developer to seek funds amid an industry-wide liquidity crunch.
Sunac sold 335 million shares in a top-up placement that raised about US$653 million, according to terms of the deal obtained by Bloomberg News.
Separately, it sold 158 million shares in its property management arm Sunac Services Holdings via a subsidiary to raise about US$300 million. Both sales were upsized.
Sunac Services shares were sold at HK$14.75, a discount of 11 per cent to last Friday's closing price, while Sunac shares were at HK$15.18, also at a discount of 11 per cent, the terms showed.
China's fourth-largest property company by sales has faced heightened market scrutiny over its financial health since a letter from a subsidiary to a local government seeking assistance surfaced in September. Sunac later denied requesting support.
A NEWSLETTER FOR YOU
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
Debt woes at Chinese developers, including China Evergrande Group and Kaisa Group Holdings, have fuelled investor concerns over the strength of even the nation's biggest property firms.
Soaring yields in the offshore bond market have made it tough for developers to roll over their debt, while falling home sales and prices have added to the gloom.
Sunac is also planning to sell its vast culture and tourism business to raise much-needed cash, Bloomberg News reported last Friday. Property developers however have been struggling to offload assets as potential buyers in the sector hoard funds given falling home prices.
The Beijing-based developer met 2 of the "three red lines" metrics set by the Chinese government to cap leverage in the sector, with its 76 per cent reading on liabilities to assets missing the 70 per cent target. Companies have until mid-2023 to meet the guidelines.
Morgan Stanley is sole bookrunner on both the top-up placement and the selldown in the property management firm. BLOOMBERG
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Property
US mortgage rates jump above 7% for the first time this year
Far East Shopping Centre back on market at unchanged S$928 million asking price
London mansions sold at 30% discount spell gloom for luxury market
Delfi Orchard up for collective sale at S$438 million guide price
US existing home sales drop in March; median price increases
German home building permits tumble 18% in February, extending rout