Acquisitive Chinese property developer Sunac China Holdings Ltd. (01918.HK) will raise US$1 billion from banks to refinance its current debts, Reuters reports, citing a filing by the company.
Sunac has been making a spate of high-profile deals, including a deal last month to buy theme parks and tourism developments from Dalian Wanda Group for 43.8 billion yuan (US$6.52 billion).
Other deals include US$2.1 billion for the real-estate assets of Legend Holdings, parent of PC-maker Lenovo (00992.HK) , and US$2.2 billion for a stake in Leshi Internet (300104.CN), a unit of LeEco – a Chinese Netflix-to-Tesla-like conglomerate.
Sunac said the fund raising would see it issue US$400 million of senior notes due in 2020 and US$600 million due in 2022, which would help “optimize” its debt structure.
“The proceeds from the notes issue are intended to be used for re-financing the group’s existing indebtedness,” it said.
The recent deal with Wanda, which saw both firms come under regulatory scrutiny over potential credit risks, had to be amended from an earlier planned deal, with Sunac scrapping plans to buy close to 80 hotels from Wanda as well.
Sunac’s founder and chairman Sun Hongbin said at the time the adjusted deal would help the company’s liquidity and lower its debt level. He added the firm had “ample” cash flow with 90 billion yuan of cash on hand.
Chinese conglomerates are coming under scrutiny over showy deals amid fears about firms taking on too much debt, creating a potential risk for China’s financial system.
Sunac said the current rights issue involved banks HSBC (00005.HK), Morgan Stanley, China CITIC Bank International, Citigroup, CMB International, Haitong International (00665.HK), IBC, ICBC International and SPDB International.
The new fundraising comes a week after Sunac said it had agreed a private share sale worth US$516.4 million.
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