What’s new: Chinese property developer Longfor Group Holdings Ltd. on Monday made an early payment towards a loan after the resignation of its chair rattled investors already put on edge by the industrywide crisis.
The company paid HK$5.1 billion ($649.7 million) towards the syndicated loan due next year, according to an exchange filing.
Longfor’s Hong Kong stock closed down 23.78% on Monday, narrowing from a 40% slump in the morning. The yield on its 3.95% offshore bond maturing 2029 jumped 9.2 percentage points.
On Friday, Longfor announced that its founder and chairman Wu Yajun had resigned and CEO Chen Xuping would take over the position.
The context: Though it’s one of the few large private developers with relatively healthy finances, Longfor has not escaped the impact of the industrywide debt, liquidity and confidence crisis. Its sales by value dropped 27.9% in the first nine months.
At a Sunday meeting with investors, Longfor said its liquidity remains stable and it is preparing to repay U.S. dollar bonds due next year ahead of schedule. Wu said the resignation was partly due to her health problems.
The price plunge is probably due to investors’ broader concerns over the real estate market, an industry insider close to Longfor said.
Like some peers, Longfor said at the meeting that it plans to build the share of its property management businesses, which include things like rental housing and commercial property, among overall profits and revenue over the next five years.
Related: More Chinese Private Developers Default on Debt
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)
Get our weekly free Must-Read newsletter.
