walleye| Another real estate company is "exploding"! He was once called the "Five Tigers of South China" with Country Garden, Evergrande, etc.

Source: Beijing Business Daily

As the real estate industry enters a period of deep adjustmentWalleyeAgile also had to face the pressure of operation and debt.

Reporter Wang Yinhao

Agile, known as the "South China five Tigers" by the industry, also exploded. May 14thWalleyeAgile announced that in view of the liquidity pressure faced by the company, the company had not paid the interest on the 2020 note on the announcement date, and the grace period for interest payment on the note expired on May 13, 2024, and is expected to be unable to meet all its payment obligations under its offshore obligations.

Affected by the news, Agile shares fell sharply at the start of trading. As of May 14, Agu Le Pao closed at 0.Walleye.61 Hong Kong dollars per share, down 12.Walleye.86%, with a total market capitalization of about HK $3.078 billion.

Failure to pay interest on bills for 2020

As for the impact of the incident, Agile said that failure to pay the relevant interest may cause the company's creditors to demand accelerated debt repayment. As of the date of the announcement, the company has not received any notice of accelerated repayment of the 2020 note from the relevant creditors. "the company will maintain active communication with creditors and will actively explore the best solutions to achieve long-term sustainable development in order to safeguard the interests of all stakeholders."

Like most out-of-risk housing companies, Agile is considering debt rollover options. Agile is considering all possible actions, including, but not limited to, developing a comprehensive debt management solution for its offshore debt, and will hire external financial and legal advisers, the announcement said. to assist in assessing its capital structure and liquidity as part of this operation and to find a viable holistic solution to its offshore debt. Agile will actively communicate with foreign creditors on potential solutions in due course.

In order to minimize the impact on business operations and meet debt repayment obligations, Agile said that it would continue to take measures to speed up the pre-sale of properties and the collection of proceeds from sales, so as to do its best to improve its balance sheet.

The latest sales figures released by Agile show that the total value of pre-sales in the four months to April 30 was 6.55 billion yuan, down 68 per cent and 73.9 per cent from 2023 and 2022 respectively.

At present, Agile has a total of nine US dollar bonds, with a total amount of US $3.647 billion. On March 25, 2024, Moody's downgraded Agile's corporate family rating from "Caa1" to "Caa2", as well as its senior unsecured notes due in 2025 from "Caa2" to "Caa3" and senior unsecured perpetual notes from "Caa2" to "Ca". The downgrade reflects the significant debt maturity risk that Agile faces in the next 12 months, as well as the possible lack of liquidity in the future due to continued sluggish sales and limited financing channels.

A loss of nearly 30 billion in two years

In the real estate industry, Agile was once known as the "South China five Tigers" with country Garden, Evergrande, R & F and Hesheng. In 2018, Agile's sales broke through the 100 billion mark for the first time and successfully became one of the 100 billion real estate enterprises.

But as the real estate industry enters a period of deep adjustment, Agile also has to face the pressure of operation and debt.

Agile's business performance peaked in 2020 and then began to turn downwards. In 2021, Agile's operating income and homing profit fell 9% and 27.11% respectively compared with the same period last year.

In 2022, Agile achieved an operating income of 54.034 billion yuan, a decrease of 26.01% compared with the same period last year; a gross profit of 1.001 billion yuan, a gross profit margin of 1.9% from 26% in 2021, and a net loss of 14.981 billion yuan belonging to shareholders, the first loss since Agile went public.

In 2023, Agile's performance continued to decline. According to the annual report, Agile's operating income in 2023 was 43.31 billion yuan, down 19.85 percent from the same period last year; the operating loss was 9.55 billion yuan, an increase of 46.7 percent over the same period in 2022; and the gross loss was 524 million yuan, with a net loss of about 12.777 billion yuan, slightly narrower than the same period in 2022.

By the end of 2023, Agile's total borrowing decreased by 5.933 billion yuan compared with 2022, but the corresponding total cash and banks also shrunk to 12.553 billion yuan. The short-term debt was 25.87 billion yuan, an increase of 7.7% over the end of 2022, and the cash-to-debt ratio decreased to 0.5. at the same time, excluding restricted cash, the cash-to-debt ratio was only 0.3.

Yan Yuejin, research director of the Yiju Research Institute, said that for real estate companies that default on their debts, it is particularly critical to establish trust with creditors, which can buy more time to deal with the debt in the short term, but restoring sufficient liquidity is the core. Generally speaking, the debt rollover scheme is only applicable to those enterprises with strong liquidity ability, high asset value and good liquidity release expectation.