Debt-ridden Guangzhou R&F Properties pledged equity in 10 subsidiaries in December in return for a massive bailout led by the Guangzhou provincial government as nearly $2 billion of debt comes due this month, reported Caixin.
The Hong Kong-listed development giant didn’t disclose how much money it raised from putting up the share stakes as collateral for new loans. The subsidiaries against which it borrowed own the company’s construction unit, its headquarters office building and a renovation project at Jishan Village in Tianhe. R&F has also been offloading other assets.
R&F Properties is one of the largest real estate companies in southern China’s Guangzhou province. As of the first half of 2020, R&F’s total liabilities exceeded RMB 350 billion ($53.6 billion), of which interest-bearing liabilities totaled RMB 190 billion. The enterprise had a cash balance of only RMB 36 billion as of September. The company planned to retain 30 billion for normal operations, reported Caixin.
In return for loans totaling an undisclosed amount, the Guangzhou government’s wholly owned Guangzhou City Construction Investment Group took pledges of R&F’s 90% stake in Guangzhou Tianli Construction Company Engineering, 25% stake in Guangzhou Shengjing Properties Development, and 50% stake in Guangzhou Fujing Jishan Real Estate Development, business registration information showed.