Zhenro unable to catch up with interest payments, adds default

Chicago, May 31 – China’s Zhenro Properties Group Ltd. had hoped to catch up with interest payments on its May 2020 notes, June 2021 notes, September 2020 notes, June 2020 notes and January 2020 notes by May 31, according to a press release.

However, the company finds that it will not be able to make the interest payments that are overdue.

The notes mentioned above are the 8.35% senior notes due 2024 (ISIN: XS2152219973), the 7.1% senior notes due 2024 (ISIN: XS2346158822), the 7.35% senior notes due 2025 (ISIN: XS2226898216), the 8.3% senior notes due 2023 (ISIN: XS2185842924) and the 7 7/8% senior notes due 2024 (ISIN: XS2099413093), respectively.

The company cites the pandemic, the extended lockdown in Shanghai, unfavorable housing market conditions and the financial environment as reasons.

The company also has issued a warning that it is unlikely to make the interest payment of $13,725,000 due May 6 on its 9.15% senior notes due 2023 (ISIN: XS2076026983) by the end of the grace period on June 5.

The non-payment is expected to constitute an event of default on the series.

Holders representing 25% of the notes may issue an acceleration notice for repayment once the default is official.

As of Tuesday, the company has not received any such acceleration notice.

The November 2019 notes will be suspended from trading on the Stock Exchange of Hong Kong starting on June 1 until further notice.

The company said it is working to formulate a plan and will seek a consensual solution with all stakeholders.

Zhenro is a Shanghai-based real estate developer.

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