Gelonghui, January 26, 丨 Baoxin Land (00299.HK) announced that on January 26, 2024, the company, Yunneng International, Baoxin Land subsidiaries (i.e. Shenzhen Chixu and Shanghai Baoyi) and Yunnan Energy Investment International entered into a repayment agreement. According to this, each contracting party conditionally agreed to repay part of the outstanding principal amount and accrued interest on the corporate bonds on January 26, 2024 in the following manner: (i) The company will induce Shenzhen Chixu (a holding company of Shenzhen Hongguanghao and a non-wholly-owned subsidiary of the indirect company) to invest in Yunnan Yunnan International (as a non-wholly-owned subsidiary of Shenzhen Hongguanghao) (International celebrity) Transfers Shenzhen Hong All of Guang Hao's shares. As of the date of this announcement, Shenzhen Hongguanghao held commercial properties in Shenyang; (ii) the company will induce Shenzhen Chixu (an indirect non-wholly-owned subsidiary of the company) to transfer all of Shenzhen Weizhi's shares to Yunnan Energy Investment International (as the synonym of Yuneng International). On the date of this announcement, Shenzhen Weizhi will hold residential properties in Shenyang; and (iii) the company will induce Shanghai Baoyi (an indirect wholly-owned subsidiary of the company) to transfer all shares in Shenzhen Baoxin Trading to Yunnan Energy Investment International (as the synonym of Yunneng International). As of the date of this announcement, Shenzhen Baoxin Trading held properties in Hefei.
According to the repayment agreement, it will be implemented after the commercial registration changes relating to the transfer of shares of the subsidiary of Gebao Xinji Land to Yunnan Energy Investment International (as the representative of Yuneng International) to offset the subsidiary's shares.
Immediately after completion, the following amounts will offset the outstanding corporate bonds: (i) approximately RMB 109,520,000, or the estimated value of all of Shenzhen Hongguanghao's shares at the time of completion of the restructuring; (ii) approximately RMB 10,250,000; and (iii) approximately RMB 125,550,000, based on the valuation of all shares of Shenzhen Baoxin Trading as assessed by an independent professional valuer appointed by Yuneng International on May 31, 2023.
According to the above, immediately after completion, it is estimated that the total amount of not less than RMB 239,850,000 but not more than approximately RMB 250,800,000 will be offset against outstanding corporate bonds, and the amount of outstanding corporate bonds will be reduced to approximately RMB 162,410,000 to approximately RMB 173,360,000.
In response to Yuneng International's written request, the company will enter into a separate agreement with Yuneng International and arrange for unconditional repayment of the remaining outstanding corporate bonds to Yuneng International.
The company said that the Group's business operations in fiscal year 2022 faced challenges due to a combination of factors such as downward pressure on the real estate industry, blocking of financing channels, wait-and-see attitudes among buyers, declining sales performance, and delays in delivery due to delays in project progress, and delays in receipt of payments. These challenges adversely affected the Group's financial performance, making it more difficult for the Group to repay external debts, make payments to suppliers, and meet pre-sale targets. The Group's property investment and development projects rely heavily on debt financing, putting a heavy interest burden on the Group.
In order to resolve liquidity issues and ease repayment pressure, the Group actively carries out debt management, optimizes debt structures, seeks debt refinancing, and accelerates the sale of existing projects and real estate properties. After considering (i) that the corporate bonds have been overdue for more than one year; (ii) the Group's current financial, debt and working capital situation; (iii) the purpose of the repayment agreement is to amicably repay some of the outstanding corporate bonds to reduce the Group's debt and financial costs and ease its working capital pressure; and (iv) under China's current property market conditions and the Group's financial situation, the repayment agreement allows the Group to realise its respective rights in Shenzhen Weizhi, Shenzhen Hongguanghao and Shenzhen Baoxin Trading, the directors believe that the repayment agreement and the proposed transactions under it are fair and reasonable, and made in accordance with normal commercial terms. And The repayment agreement is in the overall interests of the company and shareholders.
Looking ahead, the Group will continue to position its business strategy on property development and investment in the Guangdong-Hong Kong-Macao Greater Bay Area. In addition to offsetting investment properties held by subsidiaries, the Group currently has a total of five (5) property development projects located in four (4) cities of Shenzhen, Changsha, Shantou and Yunfu, involving commercial complexes, high-end boutique residences, hotels, business apartments, villas, garden houses and others.