Xin Hua Wang·2025-08-12 05:48Core Viewpoint - Country Garden (碧桂园) has swiftly acted on the recently relaxed refinancing policies for listed real estate companies by announcing a new share issuance to convert part of its debt into equity, thereby improving its financial position [1][4]. Group 1: Share Issuance Details - Country Garden plans to issue 351 million new shares at a price of HKD 0.77 per share, representing a discount of approximately 15.38% from the closing price of HKD 0.91 on August 29 [1]. - The total consideration for the new shares amounts to HKD 270 million, which will account for about 1.27% of the existing issued share capital and approximately 1.25% of the total share capital post-issuance [1]. Group 2: Purpose and Implications of the Issuance - The proceeds from the share issuance will be used to offset part of the amounts owed to the subscriber under a financing agreement, meaning the company will not receive cash from this transaction [3]. - This issuance is effectively a "debt-to-equity swap," allowing the subscriber to convert part of its debt into shares, which will help Country Garden to capitalize on certain payment amounts and reduce cash outflows [3][4]. Group 3: Subscriber Information - The subscriber is a limited company registered under Hong Kong law, fully owned by Kwan Hung Group (建滔集团), which primarily engages in investment holding [3]. - Kwan Hung Group operates through five divisions, including manufacturing and sales of chemical products, property development, and investment [3][4]. Group 4: Financial Position and Future Outlook - Following the completion of the subscription, the outstanding principal amount owed by Country Garden to the subscriber will be HKD 1.598 billion, which will be repaid in installments, with the final payment due in December 2023 [4]. - The recent refinancing actions coincide with favorable policies announced by the China Securities Regulatory Commission, which have eased restrictions on refinancing for real estate companies [4][5]. Group 5: Additional Corporate Actions - On August 25, Country Garden announced the sale of a 26.67% stake in the Guangzhou Asian Games City project to China Overseas for approximately HKD 1.29 billion, expected to yield a pre-tax profit of about HKD 500 million [5]. - The company has initiated a second bondholders' meeting for the "16碧园05" bond, proposing a 40-day grace period for the repayment of principal and/or interest due on September 2 [5].