Zhenro Properties Group failed to pay approximately 20.4 million dollars of interest on two-dollar notes by Saturday’s grace period.
In a filing sent to the Hong Kong Stock Exchange on Sunday, April 10, the developer said that it missed interest payments for 8.35 million dollars under the May 2020 Notes and 12.07 million dollars under the June 2021 Notes. That has resulted in events of default.
In its explanation, Zhenro said, “The Group’s liquidity has experienced periodic problems and therefore the Company did not make the interest payment before the last day of the grace period on 9 April 2022.”
Zhenro added, “some operations have been halted” in recent weeks owing to Covid-related lockdowns in Shanghai, and “sales and asset-disposal progress has been delayed.”
Zhenro also said that it might not be able to pay a combined 32.58 million dollars of interest on three other dollar notes, including the September 2020 Notes, June 2020 Notes and January 2020 Notes, with their grace period expiring between April 10 and May 14.
Despite the delay of interest payments, the group said that it intends to pay the due interest on all five notes by May 31.
According to Bloomberg, Zhenro’s dollar bonds are trading at distressed levels. Zhenro’s 7.1% note due 2024 was indicated at about 13 cents on Monday.