Tanyu Property Group (Holdings) Co., Ltd. (Tanyu Property) recently announced that one of its subsidiaries in Shenzhen will be used as collateral due to the inability to repay debts. The long-established real estate company, which has been listed for 18 years, now has a stock price of less than 2 Chinese cents.
On June 28, Tanyu Property released a notice regarding the arbitration involving its subsidiary and related parties.
According to the announcement, the Shenzhen International Arbitration Court ruled on the debt case of Tanyu Property’s subsidiaries, Shenzhen Xinwei Real Estate Development Co., Ltd., and Guangzhou Fengyu Property Co., Ltd.
The ruling stated that a Shenzhen branch of one of the four major state-owned banks has the right to mortgage the state-owned land use right located in the Guangming District of Shenzhen at the intersection of Guangqiao Road and Guangming Avenue, to secure the debt owed by Xinwei Real Estate to the Shenzhen branch, totaling approximately 512 million yuan.
As of December 31, 2023, the book value of the mortgage property in Xinwei Real Estate’s accounts is about 1.451 billion yuan, while the total assets of Xinwei Real Estate are approximately 1.452 billion yuan, with a net debt of about 149 million yuan, and no income or profit reported for that year.
Public records show that Tanyu Property was established in 1996, headquartered in Guangzhou, and listed on the main board of the Hong Kong Stock Exchange in 2006, becoming one of the oldest real estate companies in Guangzhou.
On April 1, Tanyu Property announced its full-year performance for the year ending December 31, 2023. The company recorded revenue of 1.632 billion yuan in 2023, down from 2.070 billion yuan in the previous year; a loss of 3.854 billion yuan for the year, compared to a loss of 3.595 billion yuan in the previous year; and a attributable loss of 3.489 billion yuan for the year, slightly lower than the 3.491 billion yuan loss in the previous year. As of the end of 2023, the group’s total borrowings amounted to 12.62 billion yuan, with cash levels decreasing to 64.7 million yuan.
As of the close of trading on July 2, Tanyu Property’s stock price was 0.015 Hong Kong dollars per share, equivalent to approximately 0.014 Chinese yuan per share.