R&F intends to repay the debts and repay the debts, and the price of the bonds has been reduced by 3% to 7%.
The mainland property market has gradually turned downwards, and with the peak of the repayment of the domestic debt, the tightness of the industry has shaken investor confidence. R&F Properties (02777), whose debt status has been concerned by the market, suddenly disclosed that it intends to issue new shares, and the company will seek shareholder authorization. In the future, it may include but is not limited to the placement method, and issue no more than 805.6 million new H shares, that is, the largest scale. Up to 25% and 79.35% of the total issued share capital and H shares, and the pricing is not less than 80% of the average closing price of the first 5 trading days at the time of issue. The proceeds will be used to repay debts and replenish working capital. .
Seeking shareholder authorization to issue 80% of H shares
The news broke out in the morning and immediately smashed a number of Chinese property stocks. R&F had fallen more than 10% at the end of the year, closing 8.7% and closing at 12.14 yuan. Other domestic housing fell between 3% and 7%, Evergrande (03333) shed 6.9%; Country Garden (02007) fell 5.3%.
R&F said it will hold an extraordinary general meeting on December 21st to seek the special authorization of shareholders to issue up to 805.6 million H shares, accounting for 25% of the company’s current total share capital and 79.35% of H shares. It is also equivalent to 20% of the enlarged total share capital and 44.24% of the H shares. In general, listed companies seek to authorize the issuance of new shares each year, mostly around 10% of the existing share capital.
Choose the right time to complete the release
Once a shareholder has passed a special authorization, it will be valid for 12 months from the date of the resolution. R&F said it will choose the right time to complete the issuance in one or several times, depending on market conditions and regulatory approvals. Assume that R&F has allotted the relevant shares and calculated the issue price at a discount of 20% of the closing price yesterday, that is, the allotment scale can reach 7.8 billion yuan.
The company emphasizes that the issuance of new H shares is very beneficial to long-term capital, which can mitigate the risks brought by economic fluctuations, significantly improve the capital structure, improve the credit rating prospects, and increase the chances of obtaining lower-cost financing.
As of the end of June, R&F’s total borrowings amounted to 159.14 billion yuan, up 11.9% from the end of last year; net liabilities amounted to 123.28 billion yuan, and the debt ratio increased by 17.9 percentage points to 187.5%. R&F has issued seven short-term financing bonds totaling 6.17 billion yuan since the beginning of the year, and was approved last month to issue 13 billion yuan of corporate bonds.
Cai Jinqiang, president of Aolu Capital, believes that R&F’s application for the issuance of new H shares will eventually be released by the China Securities Regulatory Commission, reflecting that the mainland government hopes that enterprises can use overseas financing to repay domestic debts, so as to avoid the collapse of companies with tight funds, but believe that R&F will not deliberately In the current market conditions, as the current price of the stock is only 12 Hong Kong dollars (more than 30% in the year), the placing discount price may be more than 9 Hong Kong dollars, coupled with market demand, the company is expected to have a low chance of implementation. At most, only a small number of new shares will be issued in a friendly or gesture manner. I believe that there will be no tide of allotment in the domestic market.