Debt-ridden Zhonghong Holding’s [000979:CH] non-performing loan (NPL), worth RMB2.5bn, and its 24 commercial properties in Haikou, the capital of Hainan Province, will be auctioned separately, according to Sohu on November 8. The principal, interest and interest penalty of the NPL, due on October 31, have totaled to RMB3.364bn, with China Orient AMC’s subsidiary as the creditor. It is now valued at RMB3.067bn and the auction will be from November 10 to 11. The 24 properties are valued at over RMB90m under Zhonghong’s wholly-owned Hainan subsidiary. The time of this second auction will be December 1 and 2.
Zhonghong and its affiliates have matured debts totaling to RMB7.82bn as of October 29. According to the company’s financial reports, it had a net loss of RMB1.885bn in the first three quarters of 2018 combined, down an egregious 2,379% YoY, while in 3Q18 alone, it had a net loss of RMB558m, down 1,146% YoY. To address its debt issues, Zhonghong sought partners for debt restructuring and signed contracts with two investment management firms Suzhou Guohou and Zhongtai Chuangzhan earlier this October. However, Zhonghong’s stock price kept falling and closed below RMB1 for 20 consecutive trading days. According to the Shenzhen Stock Exchange (SZSE), the company’s stock has suspended trading since October 19. On November 7, Zhonghong attended the SZSE hearing regarding its delisting, and the stock exchange will publish the final decision on November 8.