Moody’s lifts Renhe Commercial

Moody's Investors Service said it upgraded Renhe Commercial Holdings Co. Ltd.'s corporate family rating to B3 from Caa1.

The agency also said it changed the company’s outlook to stable from negative.

The upgrades follow news that Renhe Commercial completed a disposal of its underground shopping malls in China to Apex Assure Ltd. for about $1 billion in cash, Moody’s said.

The upgrades reflect an expectation that the recent liquidity pressure experienced will be alleviated with the completion of the disposal, the agency said.

The cash proceeds of $1 billion are enough to discharge all of Renhe Commercial's outstanding debt of about RMB 4.94 billion at the end of 2015, excluding the debt relating to the disposed assets, which also were transferred to the purchaser, Moody’s said.

The agency also said it expects the company to progressively repay the remainder over the next few months and to achieve a net cash position by end-2016.

The ratings also consider the small operating scale, as well as the inherent business risk and limited experience in operating its wholesale agricultural market business, Moody’s said.

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