Financial Services Association, January 12 (Reporter Li Jie) Ocean Group (03377.HK) has made new progress in its domestic debt restructuring.

The reporter learned from people familiar with the matter that COSCO Group plans to announce the overall domestic debt rollover plan this month and organize a bondholders' meeting to vote on the relevant plan.

Earlier, on January 11, Ocean Group issued an announcement stating that due to uncertainties about important matters, trading of the five bonds “H15 Ocean 3,” “H19 Ocean 1,” “H19 Ocean 2,” “H21 Ocean 1,” and “H21 Ocean 2,” issued by Ocean Holding Group (China) Co., Ltd., a wholly-owned subsidiary of the company and listed on the Shanghai Stock Exchange, was suspended from January 11.

According to information, the surviving amount of the above five bonds is 8.57 billion yuan.

“If the offshore domestic debt restructuring plan is successfully implemented, it will improve its balance and liability situation, effectively relieve liquidity pressure in the next few years, and provide a time window for its subsequent operations. Therefore, if the overall extension is approved, it will be beneficial to the company.” According to a real estate industry analyst.

However, according to relevant regulations, the overall domestic debt rollover plan introduced by COSCO requires a voting approval rate of at least 50% before it can be passed.

Earlier, on November 20, 2023, COSCO Group had agreed on payment plans with its “15 COSCO 05” and “18 COSCO 01” bondholders. COSCO Group said that currently the company has not breached any open market contracts.

Meanwhile, in terms of foreign debt, COSCO is also undergoing a comprehensive restructuring. COSCO issued an insider information announcement on September 15, 2023, stating that it will comprehensively restructure overseas debt to meet current liquidity challenges.

According to public information, there are a total of 8 overseas surviving bonds mentioned in the COSCO announcement, with a balance of 3.92 billion yuan. The most recent amount due was on July 30, 2024, but the most recent payment date was on September 21, 2023, and the rest of the bonds were paid at the end of 2023 and the beginning of 2024.

“Over the past year and a half, Ocean Group has made every effort to abide by the agreement. Through measures such as strengthening debt management, promoting asset disposal, and promoting repayment of sales, etc., the open market has made extreme efforts to pay its debts. It has also laid a solid foundation for the company to fully implement structural risk adjustments and explore a new stage of sustainable development.” According to the ocean side.

According to the reporter's incomplete statistics, since 2022, COSCO Group has successively transferred a number of assets, including Beijing Yidi Port Phase I, Beijing Yuanyang Rui Center, Beijing Ocean Future Plaza, Beijing China Life Insurance Finance Center, 50% of Chengdu Ocean Taikoo Li, and 50% of the property management company.

Despite many efforts, the improvement in liquidity fell short of expectations. Since July 2023, as industry sales performance continues to weaken, COSCO Group has tried various methods to raise capital without success. The amount of funds available on the books has continued to decrease, and there is also great uncertainty about the implementation of asset disposal being promoted simultaneously.

As of June 30, 2023, COSCO Group's total unaudited loans amounted to approximately $91.916 billion. The loans mainly included overseas and domestic loans. About 57% of the Group's total loans (approximately $52,509 billion (unreviewed)) were denominated in RMB, and the remaining 43% of total loans (approximately $39.407 billion (unreviewed)) were in other currencies (such as Hong Kong dollars and US dollars, which represented the Group's overseas loans).

It is worth noting that China Life Insurance Co., Ltd., and Dajia Life Insurance Co., Ltd., the two largest shareholders of COSCO Group, have comprehensively strengthened their governance and collaborative support for COSCO Group in 2023.

In 2023, China Life Insurance has assigned a number of directors and management personnel to Ocean Group. Chai Juan from China Life Insurance was appointed as an executive director and also served as vice president; Zhang Zhongdang and Yu Zhiqiang from China Life Insurance were appointed as non-executive directors.

According to COSCO's announcement, from January 1 to November 30, 2023, COSCO's cumulative agreed sales volume was about 47.55 billion yuan; the cumulative agreed sales floor area was about 3.9513 million square meters; and the cumulative agreed average sales price was about 12,000 yuan/square meter.