Chinese developer Sunshine 100 defaults on $245m of Singapore-listed bond payments

SINGAPORE (THE BUSINESS TIMES) – Chinese developer Sunshine 100 China Holdings has defaulted on US$178.9 million (S$245 million) of debt and interest payments due Sunday (Dec 5), as the direct fallout of the woes of property companies in China continues to impact investors in Singapore.

Sunshine 100 was due to repay the US$170 million of principal and US$8.9 million of interest on its 10.5 per cent senior notes due 2021, which is listed on the Singapore Exchange (SGX).

But in a bourse filing on Sunday, the company said it is unable to meet its debt obligations on the bonds “owing to liquidity issues arising from the adverse impact of a number of factors including the macroeconomic environment and the real estate industry”.

The default will also trigger cross default provisions under certain other debt instruments entered into by the company and its subsidiaries that may become immediately due and payable if the creditors choose to accelerate.

Sunshine 100 said that it has not received any notice by any creditors regarding action to accelerate.

The company in August suspended trading of its US$219.6 million 13 per cent senior green notes due 2022, which is also listed on the SGX.

This came after it defaulted on the repayment of US$50.9 million of principal and US$1.5 million of accrued interest under its Hong Kong-listed US$200 million 6.5 per cent convertible bonds due 2021.

The company said then that the default could trigger cross default provisions under certain other debt instruments entered into by the group that are listed on SGX. These include the 10.5 per cent senior notes due 2021 as well as the US$120 million 12 per cent senior notes due 2023.

Distress among Chinese real estate firms is spreading, amid a debt crisis at giant China Evergrande Group that is intensifying ahead of a Monday deadline for two coupon payments. The broader sector strains have pushed yields on Chinese junk dollar bonds – many of which come from the property industry – near record highs. That has made it difficult for distressed developers to refinance their maturing debt in the offshore market, which has contributed to a wave of defaults.

Evergrande chairman Hui Ka Yan was summoned by the authorities last Friday after it said there was “no guarantee that the group will have sufficient funds to continue to perform its financial obligations”.

The company said it had received a demand under a US$260 million guarantee obligation and added that it may be unable to repay due to the China property sector’s liquidity crisis.

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