(Bloomberg) -- Representatives of closely watched state-backed Chinese developer Sino-Ocean Group Holding Ltd. told some holders of a yuan note it has secured enough bondholder support to extend repayment.
That would help the firm, among the biggest homebuilders last year in locales including Beijing and nearby Tianjin, as it tries to avert a potential first default.Â
The representatives told some investors that sufficient votes were obtained for a plan to stretch repayment of a Sino-Ocean unit's 2 billion yuan ($274 million) note through August 2024, according to some bondholders who said the discussions took place in private. They asked not to be identified as they're not authorized to speak publicly. The vote ended Wednesday.
Sino-Ocean declined to comment Thursday, citing disclosure rules.
The company, whose two biggest shareholders are state-owned insurers, has been among the primary sources of recent concern in China's credit market. Once one of the stronger names in the sector, debt struggles for Sino-Ocean and larger peer Country Garden Holdings Co. have been emblematic of the ongoing cash crunch constraints for many of the country's private-sector developers.Â
New home sales nationally have slumped in recent months, and government officials have been rolling out steps to boost demand both in the property sector and elsewhere as China's economy slows.Â
About a month ago, holders of the Sino-Ocean unit's bond rejected a separate request to extend principal payments into next year. They instead approved a 30-day grace period for the note, which was originally due to mature on Aug. 2. The unit, Sino-Ocean Holding Group (China) Ltd., said last week it didn't expect to pay off the security before the grace period ended.
Most of Sino-Ocean Group's dollar bonds are indicated at or below 10 cents, according to prices compiled by Bloomberg, and the yuan note that the extension vote was on last traded at less than half of face value. The builder's shares have plunged 66% this year, among the biggest decliners in a Bloomberg Intelligence gauge of the sector.
Sino-Ocean earlier in August won bondholder approval to extend three dollar-note coupons by two months. Bloomberg News reported this week that Sino-Ocean is in talks with a potential financial adviser for exploring offshore-debt options.
--With assistance from Qingqi She and Emma Dong.
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