Zhenro Properties Group’s shares keep hitting new lows as concerns about the news that the company won’t buy back a heavy load of $200 million bonds next month.
The Shanghai-based property developer shares fell as much as 66.4%, and shares in its property services unit plunged 57.7% on Thursday. However, Zhenro told investors that its plan to call the bond remained unchanged on the same day.
The company’s reassurance did not stop investors from dumping its shares and bonds. As a result, Zhenro Properties stock continued to drop 81% on Friday to its lowest level since listing in Hong Kong in January 2018.
The stock crash also affected Zhenro in the bond market. The Shanghai Stock Exchange suspended Zhenro’s 2024 yuan bond trading for half an hour in the afternoon when the bond fell 23%.
According to Moody’s Investors Service, Zhenro was the fourth-largest issuer of high-yield bonds in Asia-Pacific when issuing over $1 billion in 2021.
Data compiled by SCMP shows that Zhenro’s $200 million 10.25% perpetual bond dropped to 50 cents on the dollar from 93 cents on Thursday.
According to Daniel Fan, a credit analyst at Bloomberg Intelligence, Zhenro’s other dollar bonds trading at 40 cents show investors expect the business “having a high possibility of restructuring,”