Nan Hai says creditors are freezing its assets as it comes up short to meet US$350 million of notes due this weekend
- The company said it “has not been able to meet part of the financial obligations” for its US$350 million, 2.9 per cent credit-enhanced notes due on June 11
- That has led to “certain creditors initiating enforcement actions,” according to a statement to the Hong Kong stock exchange
Nan Hai Corporation said creditors are freezing some of its assets because of the developer’s failure to meet the financial obligations on a dollar-denominated note due this weekend.
“This has led to part of [Nan Hai’s] assets being subject to legal process to freeze” the assets used as collateral, said Nan Hai’s executive director Liu Rong, in the exchange filing.
The action underscores how the finances of Nan Hai have fallen victim to the Covid-19 pandemic and China’s property crackdown. Unaudited revenue from Nan Hai’s cinemas plunged more than 70 per cent in 2020 and 2021, while real estate sales fell 35 per cent in 2020, widening to a 50 per cent slump last year, said the Beijing-headquartered company.
The company recorded a loss of between HK$3 billion (US$382 million) and HK$3.4 billion in 2021 because of the weak property market and China’s protracted Covid-19 pandemic, according to Nan Hai’s profit warning in March.
“These challenges have been brought on by the Covid-19 outbreak and measures implemented to deal with such an outbreak in the mainland,” Liu said.
