Updates March 30 with bond prices in paragraph 8, additional context in paragraphs 6-7
By Clare Jim
HONG KONG, March 30 (Reuters) - Hong Kong's Lai Sun Development 0488.HK is proposing a three-year extension for its $493 million dollar-denominated bond due to mature in July, the company said on Monday, confirming comments from a source.
A source who could not be named because the discussions were private said Lai Sun was meeting some bondholders on Monday and Tuesday to brief them about its plan to repay 20% of the debt due on July 28 HK236803805= upfront, and extend the rest of the payment by three years.
Lai Sun plans to officially solicit bondholders' consent in June, the source said.
The company confirmed it is meeting with bondholders and the details about the extension plan in response to questions from Reuters.
If the extension plan is implemented, Lai Sun would become one of only a handful of property developers so far in Hong Kong to carry out a liability management exercise to manage its debt, with some indebted property companies still under financial pressure despite a recovery in the residential sector.
Bigger peer New World Development 0017.HK in December completed a debt exchange to cut its perpetual bonds and senior notes by around $1.2 billion, while Road King Infrastructure 1098.HK is in the process of restructuring its $1.6 billion offshore debt.
Market experts said more property companies may need to resort to liability management exercises this year amid slumping rental incomes and valuations in persistently weak office and retail sectors.
The 5% July bond was bid at 80.712 cents on the dollar on Tuesday, down from 84.782 early on Monday, according to data by Duration Finance.
Lai Sun has another Hong Kong dollar bond worth $23 million due in November. After that, it does not face another bond maturity until 2029.
The developer last week reported a net loss of HK$1.2 billion ($153.17 million) for the six months ended Jan 31, widening from a net loss of HK$118 million a year earlier.
Its total borrowings were HK$25.8 billion as of the end of January, compared to HK$4.9 billion of financial resources including cash and undrawn banking facilities.
($1 = 7.8368 Hong Kong dollars)
(Reporting by Clare Jim; Editing by Barbara Lewis and Kevin Buckland)
((clare.jim@thomsonreuters.com;))
Comments