Glad you enjoyed the write-up. Disclosures around debt generally include currency denomination breakout which is a good indicator of onshore vs offshore. Sometimes they explicitly say where the debt is held in the annuals. More recently because of XJ and Yuhua's issues, we've seen press releases about debt domicile from some peers, specially CNHE and CEG, as dividends have been cut to try to avoid a liquidity crunch.
This is a good question, amup. Essentially its a huge concession from the bondholders and speaks to how unfairly offshore investors are being treated. The restructuring that happened was extremely disasvantageous to the bondholders, but I think the group realized at some point in the negotiations that they had no choice. In the XJ case, which is a parallel example, Oasis and PAG sued XJ claiming that the company intentionally defaulted to avoid repaying the money. The group lost despite some validity to the claim. All in all, I would be surprised if offshore investors ever loan money to this group of companies money again.
Thank you for this writeup, I've always wanted to find out more about this whole sector that is trading at such discounted levels.
How were you able to verify the existence and level of offshore debt across peers? Is this documented or did it require IR/management access?
Glad you enjoyed the write-up. Disclosures around debt generally include currency denomination breakout which is a good indicator of onshore vs offshore. Sometimes they explicitly say where the debt is held in the annuals. More recently because of XJ and Yuhua's issues, we've seen press releases about debt domicile from some peers, specially CNHE and CEG, as dividends have been cut to try to avoid a liquidity crunch.
i curious about what is the incentive to convert stock at HK$0.733 (now its hk$0.37) , its mean they gonna make loss when they convert 🤨
This is a good question, amup. Essentially its a huge concession from the bondholders and speaks to how unfairly offshore investors are being treated. The restructuring that happened was extremely disasvantageous to the bondholders, but I think the group realized at some point in the negotiations that they had no choice. In the XJ case, which is a parallel example, Oasis and PAG sued XJ claiming that the company intentionally defaulted to avoid repaying the money. The group lost despite some validity to the claim. All in all, I would be surprised if offshore investors ever loan money to this group of companies money again.
ah i see , thanks Mr.cornerstone