ROAD KING INFRA (01098.HK) announced on April 21 that its indirectly wholly-owned subsidiary, Shanghai Hexiang Real Estate Development Co., Ltd., along with other joint sellers, will divest an 80% equity stake in Shanghai Junxin Real Estate Co., Ltd. for a total consideration of 116.4 million yuan. The portion attributable to Shanghai Hexiang amounts to 94.4 million yuan, with the transaction expected to yield a net gain of approximately 3.5 million yuan.
The target company primarily developed a property project located in Waigang Town, Jiading District, Shanghai, which includes residential units, parking spaces, and self-held apartments. As of the announcement date, all residential units have been sold and delivered. The remaining assets consist of 434 unsold parking spaces and self-held apartments with a gross floor area of approximately 10,442.6 square meters.
Regarding the asset sale, ROAD KING INFRA stated that, considering the company's current financial condition, anticipated liquidity requirements, and the overall outlook of the real estate market, the divestiture will help optimize the efficiency of asset utilization, recover invested capital, and meet the company's immediate liquidity needs. These needs include tax payments and other general working capital requirements.
It is reported that ROAD KING INFRA, which is facing a debt crisis, is actively promoting a restructuring of its overseas debt. On March 16, the company announced that it had reached a principled agreement on a revised restructuring plan with a significant proportion of its creditors, including some members of an ad hoc group of creditors. This principled restructuring plan is intended to be implemented through two interconditional and interrelated debt restructuring arrangements known as the "New Option Scheme" and the "ROAD KING INFRA Scheme."
However, the restructuring negotiations have encountered difficulties. A report on March 23 indicated that two institutions within the ad hoc group of creditors, representing approximately 65% of the holdings within that group, had agreed to the latest restructuring proposal. This ad hoc group consists of holders of about 25% of the outstanding principal amount of the existing notes.
By April, reports emerged of a division within the ad hoc group. It was learned that during the overseas debt restructuring process of ROAD KING INFRA, two holders within the group, representing about 15% of the outstanding principal amount of the existing notes, agreed to the latest restructuring plan. In contrast, the remaining four holders, representing approximately 10% of the holdings, expressed dissatisfaction with the current proposal. The dissatisfied holders are reportedly considering advancing winding-up petitions against the company.