Recently, a fully owned subsidiary company of R&F Properties Limited, Zhaohui Limited, received a winding-up petition due to a $614 million outstanding loan. R&F Properties announced that on the 7th and 8th of this month, Zhaohui Limited, a wholly-owned subsidiary company, received a winding-up petition filed by Seatown Private Credit Master Fund at the High Court of the Hong Kong Special Administrative Region. The petition involves approximately $614 million in principal amount of the loan and accrued interest owed by the subsidiary company. The petition is scheduled for a hearing on September 25th.
Seatown Private Credit Master Fund is a Singapore-based private equity fund.
The board of directors stated that the petition does not represent the interests of the subsidiary company and other shareholders. The petitioner is only one of the lenders of the loan, holding an 18% outstanding principal amount.
The loan is secured by sufficient collateral, including all the shares of one of the company’s wholly-owned subsidiaries pledged as collateral, which indirectly holds 68 hotels and an office building in China.
Zhaohui Limited is seeking legal advice on the actions to be taken regarding the petition.
Previously, on March 28th, R&F Properties released its 2023 annual performance report, showing a revenue of 36.2 billion yuan, a 1.62% year-on-year increase, and a net loss of 19.947 billion yuan, with an attributable net loss of 20.164 billion yuan, a 28.14% year-on-year increase.
Regarding the significant net loss, R&F Properties explained that it mainly stems from four factors: the continued downturn in the real estate market leading to a decrease in real estate development revenue and gross profit, increased impairment provisions for properties under development and completed properties held for sale, increased fair value losses for investment properties, and offsetting deferred tax assets related to losses in previous years.
Established in 1994, R&F Properties is headquartered in Guangzhou and went public in Hong Kong in 2005. R&F Properties has been known as one of the “Five Tigers of South China” in the real estate industry.