Shen Property provides 492 million yuan in financing guarantees for Glory Real Estate

Viewpoint Network News: On March 31, Shenzhen Property Development (Group) Co., Ltd. released an announcement disclosing the progress regarding a guarantee provided to support credit financing limits for its controlling subsidiary, Shenzhen Rongyao Real Estate Development Co., Ltd.

According to the announcement, Shenzhen Property A and Rongyao Company recently signed a “Loan Supplementary Agreement” with the Industrial and Commercial Bank of China Shenzhen Branch. As supplementary documents to the original “Project Financing Loan Agreement” and “Guarantee Agreement,” the original agreement has not undergone any substantive changes.

The guarantee covers the principal amount of the principal debt of approximately RMB 49,224.17 million, with an interest rate based on LPR (one-year term) with an increase by a certain percentage. The term for fulfilling the principal debt runs from March 30, 2026 to May 20, 2028. Shenzhen Property A provides a full-amount joint and several liability guarantee. The scope of the guarantee includes the principal of the principal debt, interest (including penalty interest and compound interest), liquidated damages, damages for losses, and expenses incurred by the creditor in realizing its claims, among others. The guarantee period is three years from the date on which the term for performance of the principal debt expires.

This guarantee matter originates from the resolutions considered and approved at the 9th meeting of the ninth session of the company’s board of directors in October 2019 and the 3rd extraordinary general meeting of shareholders in November 2019. The resolutions approved providing a guarantee for Rongyao Company’s RMB 5 billion credit financing limits, to be used to refinance prior loans, project relocation and demolition expenditures, development and construction expenditures, and so on.

The announcement states that the asset-liability ratio of the guaranteed party, Rongyao Company, exceeds 70%, and the company and its controlling subsidiaries’ total amount of external guarantees exceeds 100% of the audited net assets in the latest period. After this guarantee, the total guarantee limits of the company and its controlling subsidiaries will be RMB 6.57 billion, the total outstanding balance will be approximately RMB 4.259 billion, accounting for 125.46% of the company’s latest audited net assets.

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