CFLD is cash-strapped and needs to raise funds urgently. Although its net debt to equity was 193% as of June 30, 2020, the company has total assets of US$11.76 billion ($15.8 billion), investment properties valued at US$1.1 billion, and US$41 billion of inventory, according to filings on SGXnet. Also, CFLD’s cash to short-term borrowings is 1.18 times while liabilities to assets is 0.83 times.
Sincere Property Group was not the only Chinese company that defaulted on a bond payment. China Fortune Land Development Co also defaulted on a USD bond which matured on Feb 28. On Feb 26, CFLD Cayman Investment, which issued some US$4.6 billion worth of offshore bonds in Singapore on behalf of CFLD, announced on SGXnet that it would not be redeeming its US$530 million tranche issued out of Singapore.
On Feb 19, CFLD Cayman had already announced it had short-term liquidity problems which needed to be urgently addressed. “To properly address its liquidity issues and improve its business operations, the company has appointed Admiralty Harbour Capital as its financial advisor and Sidley Austin as its legal advisor to assist it in exploring options available to it and navigating and resolving the issues it currently faces, to achieve the best outcome for the company and all of its stakeholders,” CFLD Cayman says.
