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On August 20, Guangzhou R&F Properties Co., Ltd. (R&F Properties, 02777.HK) released insider information.

On August 19, R&F Properties (Hong Kong) Limited, a wholly-owned subsidiary of R&F Properties, one of the guarantors under the financing agreement, received a winding-up petition filed by the Petitioner (one of the lenders holding 18% of the outstanding principal of the loan) in the High Court in relation to R&F Hong Kong's outstanding proportionate principal amount of the loan and interest payable to the Petitioner. The petition against R&F Hong Kong will be heard in the Hong Kong High Court on October 30, 2024.

On July 8, R&F Properties' subsidiary, Zhaoxi Limited, received a winding-up petition filed by petitioner Seatown Private Credit Master Fund in the High Court of the Hong Kong Special Administrative Region of the People's Republic of China, involving the subsidiary's failure to repay the petitioner's proportionate share of the loan principal and interest payable. The petition will be heard in the High Court on September 25, 2024.

The announcement stated that the financing agreement dated January 13, 2023 was entered into by R&F Properties' wholly-owned subsidiary, Zhao Xi Co., Ltd., as the borrower, R&F Properties (Hong Kong) Co., Ltd., as one of the guarantors, R&F Properties as one of the obligors, Serica Agency Limited as the agent and guarantee agent, and the named lenders. As of the date of this announcement, the total amount (including principal and interest payable) of approximately US$613.66 million of loans has not been repaid. The petition against Zhao Xi will be heard in the Hong Kong High Court on September 25, 2024.

R&F Properties believes that neither the petition against Zhao Xi nor the petition against R&F Hong Kong represents the interests of Zhao Xi, R&F Hong Kong or other stakeholders of the Company. The Petitioner is only one of the lenders of the loan and only holds 18% of the outstanding principal amount of the loan.

As stated in the Announcements, the Loan is adequately secured by, among other things, the entire equity interest in a wholly owned subsidiary of the Company, which indirectly holds 68 hotels and an office building in the People's Republic of China. The secured creditors may exercise their rights to enforce the security rather than to apply for a winding up of the subsidiary. Any such attempt to apply for a winding up would damage value and reduce the recoveries available to the creditors.

The Group is seeking legal advice in relation to the Petitions and will take all necessary actions to protect its legal rights.

As stated in the Announcements, the Company has engaged A&M Capital Partners Limited as its financial advisor and Sidley Austin LLP as its legal advisor to develop an overall liability management plan for the Group’s offshore debts. The Company is working with the advisors to explore a comprehensive and feasible solution to protect the interests of all stakeholders and ensure the long-term development of the Group in the future. The Company will actively communicate and cooperate with offshore creditors on the restructuring plan.

On the sales side, from January to July this year, R&F Properties' total sales revenue was approximately RMB 6.38 billion, and the sales area reached approximately 463,600 square meters.

As of August 11, three senior notes issued by R&F Properties' Singapore-listed subsidiary, E-Lux Limited, had not paid interest in cash before maturity, totaling US$147 million. Among the three senior notes, the principal amount of 2025 notes of US$1,034,162,134 million, the principal amount of 2027 notes of US$1,921,827,815 million, and the principal amount of 2028 notes of US$1,571,167,017 million have not yet been repaid.