So far, instead of solving the plight of HHH, the debt problem continues to magnify!
In just a few weeks, the scale of new overdue debts exceeded 10 billion. on March 23, HHH announced that the amount of new overdue debt principal and interest was 12.983 billion yuan, and the accumulated failure to repay debt principal and interest as scheduled totaled 32.384 billion yuan.
The company’s creditors’ committee is also speeding up action in the face of the rapid increase in the overdue amount. on March 23, China Merchants Bank (52.12-2.54%, stock), the main underwriter of Huaxia Happiness bonds, and CITIC Securities (24.23+0.71%, stock) announced that they had held the second debt holders’ meeting and failed to consider and pass the waiver motion. At present, the extension arrangement is being promoted, and the company will promote the arrangement after formulating a specific repayment plan within the year under the joint communication and coordination with other intermediaries such as the lead underwriter, the debt committee and other relevant parties.
Accumulated overdue debt of 32.384 billion yuan
On March 23, Huaxia Happiness Foundation Co., Ltd. released an announcement about the failure of the company and its subsidiaries to repay some debts as scheduled. On the same day, SSE announced that it had not received interest payment funds for “20 Huaxia Happiness MTN001”.
The announcement said that due to the macroeconomic environment, industry environment and credit environment overlapping with several rounds of epidemics, Huaxia Happiness’ liquidity has been tight for a period of Time, and recently the company and its subsidiaries have failed to repay the principal and interest of bank loans, trust loans and other debts in the amount of 12.983 billion yuan as scheduled, including the debt that should be repaid on March 24, 2021 (i.e. the disclosure date of this announcement). As of the disclosure date of this announcement, the company has failed to repay the principal and interest of the debts totaling RMB32.384 billion as scheduled, and the company is now actively coordinating with the above-mentioned overdue financial institutions on matters related to the extension.
Huaxia said that the failure to repay the debts as scheduled due to the company’s liquidity tension has a great impact on the company’s financing; in order to solve the company’s debt risk and accelerate the promotion of the company’s orderly operation, the company is actively coordinating with all parties to discuss various ways to solve the current problems.
The second bondholder meeting failed to waive
Facing the rapid increase of the overdue amount, the creditors’ committee of Huaxia Happiness is also speeding up its action.
On the day of March 23, CITIC Securities announced that China Merchants Bank, the main underwriter of Huaxia Happiness bonds, and CITIC Securities held a holders’ meeting and the bondholders (or bondholders’ agents) attending the second bondholders’ meeting of Huaxia Happiness Foundation Co. According to the provisions of the Prospectus and the Rules of the Bondholders’ Meeting, the meeting could not be convened, nor could the exempted proposal of the meeting be considered and passed.
The announcement shows that on March 18, the two main underwriters notified Huaxia Happiness Company that the “20 Huaxia Happiness MTN001” issued on March 23, 2020 and “20 Huaxia Happiness MTN002” issued on April 20, 2020 by their companies “, both triggered the cross-protection clause, both should be payable on March 19, 2021 in advance of maturity, is currently promoting the extension work arrangements, the company will promote the specific repayment plan to be arranged after the formulation of the year under the joint communication and coordination with other intermediaries such as the lead underwriter, the debt committee and other relevant parties.
In addition, a media source revealed that Huaxia has informed its creditors’ committee members last week to submit debt applications before March 31, and only outstanding claims on or after March 20 will be eligible for submission. After receiving the claims, the creditors’ committee will coordinate with the company to start the claim confirmation process and initiate due diligence, which is expected to be completed within 45 days.
Huaxia’s share price plunged nearly 80%
Faced with the reality of constant defaults, Huaxia Happiness’ share price also continued to fall, quoting 6.69 yuan per share on the 23rd, down 3.04%, while reviewing the all-time high closing price of 31.19 yuan on February 1, 2018, Huaxia Happiness’ share price has dropped nearly 80% in more than 3 years.
This drop “mirrors” and compares with the drop in Beijing-ring Home prices. Since the restriction of purchase around Beijing in 2018, there has been a continuous decline in housing prices around Beijing. At present, Shijiazhuang, the capital of Hebei Province, has seen its house prices fall back to the three-year level; Langfang has seen its house prices fall by 46.9%, making it the largest city in Hebei Province; Yanjiao, the first brother of Beijing, has seen its house prices fall by a staggering amount, from a high of more than 40,000 a flat to 19,000 today; Bazhou, a city around Beijing, has also seen its house prices fall by 40%.
Faced with the credit rating downgrades by Moody’s, Fitch and China Credit Rating Agency, investors are increasingly worried about the solvency of Huaxia Happiness. And due to the restriction of purchase in the Beijing-ring area where it is heavily positioned, overlaid with the impact of the 2020 Epidemic, Huaxia Happiness’ sales return is weak. Although Huaxia Happiness has been adjusting its regional and business layout in recent years to relieve the pressure brought by the Beijing ring purchase restriction, it takes time for the adjustment to work. 2021 is the peak of Huaxia Happiness’ debt repayment period, and it is a difficult test for Huaxia Happiness to face hundreds of billions of maturing liabilities.
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