Sunshine City: failed to pay interest on two overseas bonds, domestic bonds may trigger cross default

2022-08-03 0 By

On the evening of February 18th, Yango Group Co.,Ltd (hereinafter referred to as “Sunshine City”) issued a notice regarding shenzhen Stock Exchange’s reply to the company’s letter of concern.Sunshine City said in a statement that it would face a serious situation of cross-default on a large number of outstanding domestic bonds if it failed to pay interest on the two overseas bonds within the grace period.According to the announcement, On January 29, Yango City received a “Letter of Concern regarding Yango Group Co.,Ltd” (” Letter of Concern “) from the Shenzhen Stock Exchange.Shenzhen stock exchange on functional requirements in sunshine town combined with the company’s business situation and financial conditions, the company so far interest-bearing debt balance, and the overdue debts due to it in the short term, short-term and long-term solvency analysis company, indicating the company whether there is liquidity risk, the going-concern ability whether there is significant uncertainty.In this regard, the sunshine City replied that from 2021 to the present, due to the upgrading of policy regulation, the real estate industry faces an unexpected tightening of funds. On the one hand, the normal open market refinancing has been completely frozen, and financial institutions have tightened the amount of investment, which makes the company’s financing pressure drop especially serious;On the other hand, the supervision of pre-sale funds has become significantly stricter, affecting the collection and activation of funds, and the available funds have declined significantly;Coupled with the market downturn, the housing market cold.As a result of multiple factors, the company’s liquidity has been under unprecedented pressure since the fourth quarter of 2021, and the available monetary funds have been seriously affected, resulting in high short-term and long-term debt repayment pressure.Up to now, Sunny City has exhausted its liquidity and failed to pay the interest of two overseas bonds within the grace period, and will face the serious situation of cross-default triggered by a large number of outstanding domestic bonds.However, Sunshine City is still trying to resolve the extreme pressure of fully triggering the cross default, and actively communicating with holders to waiver the cross default clause, in order to stabilize the normal operation order of the company, win more time to raise funds and resolve liquidity risks.Source: Beijing News