Powerlong defaults on notes, offshore long-term bank debt

By Marisa Wong

Los Angeles, Nov. 29 – Powerlong Real Estate Holdings Ltd. has not made the interest payment due on its 5.95% senior notes due April 2025 (ISIN: XS2250030090) as of Nov. 29, according to a company notice.

Interest in the amount of $15,916,250 became due and payable on Oct. 30, and the company had a 30-day grace period to make the interest payment.

The non-payment will result in an event of default under the terms of some of the company’s offshore long-term interest-bearing bank and other borrowings.

As of Nov. 29, the group has not received any acceleration notice with respect to its debt.

The company explained that due to the complex business environment, sales have been recovering at a slow pace, and its liquidity position has continued to deteriorate. The company said it expects that its cash on hand and bank deposits will not be sufficient to cover its existing and future debt, despite all the efforts it has made.

The company said that from Jan. 1, 2022 to its announcement on Wednesday, it has repaid total principal and interest of about RMB 6.12 billion of its offshore debt.

As of the latest announcement, the company continues to maintain normal business operations.

The company said that in light of the pressure it currently faces, it believes “a holistic solution to all of its existing debt should be explored immediately to secure the sustainable operations of the group for the benefit of all of its stakeholders.”

The company has engaged Haitong International Securities Co. Ltd as its financial advisor and Sidley Austin as its legal advisor to facilitate talks between the company and its creditors.

Offshore creditors may contact representatives of Haitong (+852 2848 4333; project.powerlong@htisec.com).

The real estate company is based in Hong Kong.

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