[1/5]A view of the residential apartments in Country Garden’s Forest City development in Johor Bahru, Malaysia August 16, 2023. REUTERS/Edgar Su/File Photo Acquire Licensing Rights
HONG KONG, Oct 19 (Reuters) – Country Garden (2007.HK) bondholders are seeking urgent talks with the troubled property developer after it missed a $15 million coupon repayment, putting it at risk of default, according to three sources with direct knowledge of the matter.
Two bondholder groups have emerged seeking discussions about a potential debt restructuring package, said the sources, who declined to be identified because the information is confidential.
That group holds about $2 billion of Chinese property developer’s offshore bonds, one the sources said, and consists of international and fund manager investors.
The group hired PJT Partners (PJT.N) as financial adviser to lead discussions with Country Garden, two people with knowledge of the matter said. A PJT spokesman declined to comment.
A Country Garden default could exacerbate the country’s real estate crisis and could delay the prospect of a recovery of the property market and the wider Chinese economy.
Ratings agency Moody’s said on Thursday it could downgrade Country Garden’s (2007.HK) ‘corporate family rating’ if the recovery prospects for its creditors weaken further.
Moody’s said Country Garden’s senior unsecured rating of C was already at the lowest of its rating scale.
Country Garden’s Australian subsidiary is on the verge of closing a $250 million sale, offloading an undeveloped housing plot in Melbourne to Singapore’s Frasers Property, according to a person close to the deal who declined to be identified as they were not authorised to speak to media.
Country Garden and Frasers did not immediately respond for a request for comment on that sale. The deal was first reported by the Australian Financial Review.
Country Garden on Wednesday was due to pay a $15 million coupon payment on a bond due September 2025 when a 30-day grace period ended, but two bondholders told Reuters they were yet to receive it.
Non-payment would put the developer at risk of default on its nearly $11 billion of outstanding offshore bonds and could trigger one of China’s biggest corporate debt restructurings.
The company has not commented on whether it made the payment. On Wednesday, it said it was unlikely to be able to meet most of its upcoming offshore debt payments.
Country Garden has appointed Houlihan Lokey, China International Capital Corporation (CICC) and law firm Sidley Austin as advisers to examine its capital structure and liquidity position and formulate a “holistic” solution.
“The focus now is on how Country Garden’s debt restructuring will proceed from here,” said CreditSights, which noted its dollar bond prices have already priced in expectations of an imminent restructuring, adding that the road to restructuring is likely to be “long and bumpy”.
Country Garden’s bonds were bid at 4.39 to 5.33 cents on the dollar on Thursday, according to data by Duration Finance, indicating investors have little confidence in the company’s near-term future.
Approval of restructuring plan could provide room for the developer to sell assets and maintain operations, which could be helpful in stabilising the market in the medium term, HSBC said in a report.
Country Garden said on Thursday its founder Yeung Kwok Keung and chairperson Yang Huiyan, his daughter, are at work as usual, according to the official WeChat account, denying online reports of the pair leaving the country.
Founder Yeung quit Country Garden’s board in March and daughter Yang became chairperson. Yeung remains a special adviser.
Yeung was shown in photos receiving the chairman of state-owned China National Agricultural Development Group (CNADC) in the company headquarters in Shunde, Guangdong province, on Tuesday, a separate company post said late on Wednesday.
CNADC chairman Cao Jianglin was quoted as saying Country Garden is “a corporate with responsibility and devotion to the country”, in a rare visit and remark by SOE official regarding a troubled developer.
Country Garden’s missed payment comes on the heels of an investigation into the chairman of peer China Evergrande (3333.HK), which has defaulted and has been at the centre of the sector’s debt crisis.
Reporting by Scott Murdoch in Sydney and Xie Yu and Clare Jim in Hong Kong; Additional reporting by Anousha Sakoui in London; Liz Lee in Beijing and Lewis Jackson in Sydndey; Writing by Scott Murdoch; Editing by Kim Coghill, Christopher Cushing, Jamie Freed, Lincoln Feast, Miral Fahmy and Jane Merriman
Our Standards: The Thomson Reuters Trust Principles.
[1/2]People take photos by the Morgan Stanley building in Times Square in New York City, New York U.S., February 20, 2020. REUTERS/Brendan McDermid/File Photo Acquire Licensing Rights
Oct 18 (Reuters) – Morgan Stanley’s (MS.N) third-quarter profit showed a hit from lethargic dealmaking, while shares sank 7.4% as some analysts pointed to a fall in net new assets in its wealth division and disappointment over the lack of news on succession.
The bank saw a sharp drop in investment banking revenues and sluggish trading as dealflow took a hit when geopolitical risk rose following the war in Ukraine and the Federal Reserve aggressively raised interest rates.
Analysts at Goldman Sachs said they expected a negative market reaction as the inflow of assets to wealth management fell, and conversion to higher fees over the assets was slow.
Net new assets in wealth management shrank to $35.7 billion from $64.8 billion a year earlier.
Meanwhile, analysts at Evercore criticized the lack of an announcement on a long-anticipated CEO succession, which they said “is a mistake by the Board as more time can only increase angst and divide parties.”
CEO James Gorman, who has run the Wall Street giant since 2010, announced in May that he would step down within a year.
Shares fell 7.4% to a one-year low, despite the bank beating estimates.
The bank’s profit dropped about 9% to $2.4 billion, or $1.38 per diluted share, for the three months ended Sept. 30, a smaller drop than analysts had expected. Analysts had forecast $1.28 per share, according to LSEG IBES data.
Gorman said the bank “is in excellent shape, notwithstanding the geopolitical and market turmoil that we find ourselves in,” and added an announcement of his chosen successor is getting close.
“I don’t want to give you an exact time because that’s sort of a spoiler … but we’re well into it,” he told analysts on Wednesday.
The strongest candidates are co-presidents Ted Pick and Andy Saperstein, respectively heads of institutional securities and wealth management, while Dan Simkowitz, head of asset management, is also being considered, Reuters has reported, citing a source.
INVESTMENT BANKING
Revenue from investment banking, led by Ted Pick, fell 27% to $938 million, as global mergers and acquisitions activity showed few signs of improvement due to rising interest rates, antitrust scrutiny and an uncertain economic and geopolitical outlook.
Gorman said although he saw recent improvement, he expected a sustained pick up only next year. While we expect momentum to continue this year, given the fourth quarter has some seasonal considerations, we expect most of the activity to materialize in 2024″, he said.
Morgan Stanley CFO Sharon Yeshaya added that the most active industries are expected to be finance, energy, technology and artificial intelligence.
Morgan Stanley’s revenue in fixed income underwriting fell even as rivals had higher revenues with stronger market activity. Yeshaya said Morgan Stanley cannot be compared to rivals due to different considerations of capital allocation and not only fees.
Trading, under Pick, was also muted, with a 2% rise in equity trading and 11% drop in fixed income. Gorman and Yeshaya told analysts clients were beginning to reduce cash positions and put money into markets.
Gorman said he expects trading to start picking up once interest rates begin to come down. The CEO has repeatedly said the results of each unit will not be a factor in choosing the next CEO.
CRE WEAKNESS
Morgan Stanley also set aside $134 million in provisions for credit losses, surging from $35 million in the same quarter last year, driven by worsening conditions in commercial real estate (CRE). Part of the growth was a provision to cover losses with one specific loan that was not disclosed. Yeshaya said the bank has been “proactive” in the provisioning and that its exposure is smaller than 5% of the credit portfolio.
The results round out a largely upbeat reporting season for Wall Street’s biggest banks, which benefited from rising income from interest payments.
Profit at rival Goldman Sachs also dropped less than expected in the third quarter.
Reporting by Manya Saini, Noor Zainab Hussain and Niket Nishant in Bengaluru and Tatiana Bautzer, Sinead Carew and Saeed Azhar in New York; Editing by Megan Davies, Lananh Nguyen, Shounak Dasgupta and Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles.
The ticker symbol and logo for Goldman Sachs is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., December 18, 2018. REUTERS/Brendan McDermid/File Photo Acquire Licensing Rights
Oct 17 (Reuters) – Goldman Sachs’ (GS.N) third-quarter profit dropped less than expected as a nascent recovery in dealmaking offset the $864 million writedown related to its GreenSky fintech business and real estate investments.
The Wall Street giant’s net profit slumped 33% to $2.06 billion, or $5.47 per share, it said on Tuesday. Analysts on average had expected a profit of $5.31 per share, according to LSEG data.
Shares of the bank inched up 0.3% at $315.30 in volatile premarket trading.
“The work we’re doing now provides us a much stronger platform for 2024. I also expect a continued recovery in both capital markets and strategic activity if conditions remain conducive,” CEO David Solomon said in a statement.
Goldman was an underwriter for high-profile initial public offerings (IPO) in September, including SoftBank Group’s (9984.T) chip designer Arm Holdings and grocery delivery app Instacart (CART.O).
The share sales sparked optimism about a recovery in the IPO market, but poor performance after debuts and the lukewarm reception to Germany’s sandal maker Birkenstock (BIRK.N) have raised doubts.
Goldman’s investment banking fees of $1.55 billion was largely unchanged from last year as debt underwriting activity resumed and the market for initial public offerings picked up.
The U.S. Federal Reserve may raise interest rates one more time this year, while several bank executives have said they expected borrowing costs to stay higher for longer.
CONSUMER BANKING WEAKNESS LINGERS
Goldman’s ill-fated foray into consumer banking, which has lost $3 billion over three years, continued to weigh.
The bank took a $506 million writedown on GreenSky, which facilitates home improvement loans for consumers and was sold to a consortium of investment firms led by Sixth Street Partners.
It was bought for $1.7 billion last year although it was valued at $2.2 billion when the deal was first announced in 2021. Goldman took a charge of $504 million on GreenSky in the second quarter.
Real estate investments were another drag on earnings as the bank booked an impairment charge of $358 million compared with $485 million in the second quarter.
That weighed on revenue from its asset and wealth management unit, which slipped 20% to $3.23 billion.
Commercial real estate loans, which have emerged as a risk for banks as interest rates rise, accounted for 14% of the total loan portfolio of Goldman.
Solomon has shifted the firm’s focus back to its traditional strengths – investment banking and trading, and aims to grow in asset and wealth management.
Investment banking results have been mixed for peers, with JPMorgan Chase (JPM.N) reporting a 6% decline in revenue, while Citigroup (C.N) said fees jumped 34%. Morgan Stanley (MS.N) is set to report its earnings on Wednesday.
Goldman had a headcount of 45,900 as of September end, up 3% from a quarter ago, but down nearly 7% from the year-ago period.
The bank has laid off thousands of employees this year, including a round of cuts in January that was its largest since the 2008 financial crisis.
Reporting by Niket Nishant and Noor Zainab Hussain in Bengaluru and Saeed Azhar in New York;
Editing by Lananh Nguyen and Arun Koyyur
Our Standards: The Thomson Reuters Trust Principles.
Customers use ATMs at a Citibank branch in the Jackson Heights neighborhood of the Queens borough of New York City, U.S. October 11, 2020. REUTERS/Nick Zieminski/File Photo Acquire Licensing Rights
NEW YORK, Oct 13 (Reuters) – Citigroup’s (C.N) profit was broadly steady in the third quarter, fueled by rising interest payments and surging investment banking fees.
The bank’s net income rose to $3.5 billion from a year ago, it reported on Friday, while earnings per share remained stable at $1.63, exceeding the consensus estimate of $1.21 by analysts polled by LSEG.
Revenue at Citi’s institutional clients group that houses its Wall Street operations increased 12% from a year ago, fueled by a jump in investment banking fees. The gains were a bright spot after several quarters of depressed dealmaking.
Citi’s overall revenue climbed 9% to $20.1 billion.
The third largest U.S. lender set aside more money to cover potential bad loans, even though delinquency levels were still low compared to historical levels.
CEO Jane Fraser announced a sweeping reorganization last month that will disband ICG and give her more direct oversight over the company’s businesses. The new structure is not yet reflected in the third-quarter results.
Expenses rose due to rising costs and investments in control systems. The expenses included severance payments for employees who were laid off during the sale of its international businesses.
Citi has not yet announced the expected headcount reduction and expected savings with the reorganization that will reduce management layers and prompt layoffs across its businesses.
Fraser has said there was “no room for bystanders” as the bank embarked on its biggest overhaul in almost two decades. The changes are being rolled out at a time of economic uncertainty that has weighed on some of Citi’s key businesses like trading.
Rivals Wells Fargo (WFC.N) and JPMorgan Chase (JPM.N) also reported higher quarterly profits on Friday, boosted by a rise interest payments.
Reporting by Manya Saini in Bengaluru and Tatiana Bautzer in New York; Editing by Lananh Nguyen and Arun Koyyur
Our Standards: The Thomson Reuters Trust Principles.
A sign outside the headquarters of JP Morgan Chase & Co in New York, September 19, 2013. REUTERS/Mike Segar/File Photo Acquire Licensing Rights
NEW YORK, Sept 26 (Reuters) – JPMorgan Chase (JPM.N) reorganized the leadership in its investment bank, promoting a new head in North America to succeed Fernando Rivas, who plans to retire, according to a memo seen by Reuters.
Rivas, who previously ran the financial institutions group, was one of JPMorgan’s lead negotiators in its purchase of failed First Republic Bank in May. He will be replaced by Jay Horine.
The bank also appointed several global heads for industry groups reporting to Jim Casey and Vis Raghavan, its co-heads of global investment banking, effective immediately.
Reporting by Nupur Anand in New York; Editing by Lananh Nguyen and David Gregorio
Our Standards: The Thomson Reuters Trust Principles.
A sign of Wanda is pictured at the headquarters of Dalian Wanda Group, in Beijing’s Central Business District (CBD), China August 8, 2023. REUTERS/Tingshu Wang/File Photo Acquire Licensing Rights
LONDON/FRANKFURT/NEW YORK, Aug 17 (Reuters) – Dalian Wanda Group, owned by China’s once-richest man Wang Jianlin, is seeking to sell its sports marketing unit Infront as financial pressure mounts on the property developer to shore up its finances, four people familiar with the matter told Reuters.
China’s largest commercial property group has tapped Deutsche Bank for advice on the sale of Infront Sports & Media, the sources said, adding the process is in the early stages and could take months to complete.
Private equity firms are looking at Infront, three of the sources said. The successful buyer is likely to be an investor with deep pockets because of the minimum guarantees the company is required to pay for sports rights, one of the sources added.
Headquartered in Switzerland, Infront’s businesses include managing Italy’s Serie A and the UK Premier League’s international media rights, as well as event operations, media rights distribution and sponsorship sales.
In June, Infront was awarded broadcast rights in 22 countries in Central and South East Asia for the Olympic Games from 2026 through 2032.
Wanda and Deutsche Bank declined to comment. Infront did not immediately return requests for comment.
The sources, who requested anonymity as the matter is confidential, cautioned a deal is not certain and is subject to market conditions.
China’s property developers have been battered over the last few years as falling sales and a wave of debt defaults have savaged a sector that previously contributed around a quarter of the country’s gross domestic product.
In July, the three main credit ratings agencies downgraded Dalian Wanda’s commercial management unit, warning of “non-payment risk” ahead of the repayment of a $400 million bond that had been due at the time. It raised $320 million through the partial sale of its entertainment unit Beijing Wanda Cultural Industry to pay it off.
It also stalled on a $22 million-dollar bond coupon payment in June, though it ultimately paid within the grace period. Additionally, it is facing litigation and asset freeze orders from courts in China due to payment disputes.
Wanda bought a majority stake in Infront for 1.05 billion euros ($1.1 billion) in 2015, in what was then an effort to support China in bidding for major sports events. It does not disclose financials for Infront.
Companies in the sports marketing sector have been strapped for cash after a downturn during the COVID pandemic.
Spain’s Mediapro, which manages international media rights for LaLiga, restructured 900 million euros in debt a year ago selling shares to investors including the group’s majority shareholder Southwind.
($1 = 0.9204 euros)
Reporting by Amy-Jo Crowley, Emma-Victoria Farr and Milana Vinn, additional reporting by Andres Gonzalez, Kane Wu and Clare Jim, editing by Elisa Martinuzzi and Sharon Singleton
Our Standards: The Thomson Reuters Trust Principles.
General view of the Burj Khalifa and the downtown skyline in Dubai, United Arab Emirates, September 30, 2021. REUTERS/Mohammed Salem/File Photo
DUBAI, Aug 14 (Reuters) – Dubai-listed investment bank and asset manager Shuaa Capital’s top shareholder Jassim Alseddiqi is stepping down as managing director and selling his nearly 30% stake, he said on Monday.
Shuaa (SHUA.DU) last year completed a $100 million initial public offering of a special purpose acquisition company (SPAC) on New York’s Nasdaq exchange.
Alseddiqi is leaving Shuaa to pursue “a foray into the world of technology, research, and academia,” he said in a LinkedIn post.
“In line with this transition and my evolving direction and endeavours, I’ve decided to reposition my stake in SHUAA Capital, paving the way for new shareholders.”
Alseddiqi owned 29.99% of Shuaa at the end of 2022, according to the company’s annual report. Direct Access Investment owned 27.3% and Al Baher Real Estate Development owned 8.32%, with no other shareholders owning more than 5% at the end of last year.
Bloomberg News reported on Monday, citing unnamed people familiar with the matter, that Shuaa shareholders that collectively own more than 50%, including Alseddiqi, are looking to sell down their stakes and are in talks with potential advisers.
They would prefer to sell to a single strategic buyer or consortium but might decide not to sell or only sell part of their holdings, Bloomberg said.
Shuaa did not immediately respond to a request for comment.
Founded in 1979, Shuaa has led several big transactions in the Middle East, including as one of four banks on now-delisted Dubai state-owned port operator DP World’s $5 billion initial public offering in 2007, the region’s largest IPO at the time.
Reporting by Yousef Saba; editing by Barbara Lewis
Our Standards: The Thomson Reuters Trust Principles.
BEIJING, Aug 1 (Reuters) – China will lower financing costs for firms, stabilise market expectations and support the property sector in coming months, the central bank said on Tuesday amid a flagging economic recovery.
The world’s No.2 economy staged a better-than-expected recovery in the first quarter following COVID reopening but has lost steam since the April-June quarter as demand waned both at home and abroad.
The People’s Bank of China’s (PBOC) statement followed a meeting at which officials from the bank and the State Administration of Foreign Exchange (SAFE) looked to the second half of the year.
As the property sector had failed to get out of the woods yet, the PBOC pledged it would support a “stable and healthy development” of the real estate market, including continuing to guide the reduction of personal housing loan interest rates and downpayment ratios, according to the statement.
The PBOC will also guide commercial banks to adjust rates on existing mortgages in a legal and orderly manner.
A private survey showed on Tuesday average new home prices in 100 Chinese cities fell for a third consecutive month in July.
China will also pay close attention to cross-border capital fluctuations, keep the yuan basically stable and step up support for firms to hedge exchange rate risks, the PBOC statement said.
To ease pressure on the yuan, Chinese currency regulators have in recent weeks asked some commercial banks to reduce or delay their dollar purchases, Reuters reported on Tuesday, citing two people with direct knowledge of the matter.
The country will also coordinate financial support on the settlement of local government debt risks and effectively fend off financial risks in key areas, the statement said.
Pan Gongsheng, the PBOC governor as well as the head of SAFE, spoke at the meeting.
Reporting by Ellen Zhang, Ella Cao and Kevin Yao in Beijing and Twinnie Siu in Hong Kong; editing by Christina Fincher and Nick Macfie
Our Standards: The Thomson Reuters Trust Principles.
KYIV, July 21 (Reuters) – The World Bank’s private investment arm is considering $1.5 billion in investments in Ukraine’s banking, agribusiness and infrastructure sectors, a senior official with the International Finance Corporation (IFC) said on Friday.
Alfonso Garcia Mora, IFC’s Regional Vice President for Europe, Latin America and the Caribbean, hailed the resilience of Ukraine’s private sector during the war, and said the lender had provided nearly $400 million in support since the start of Russia’s invasion nearly 17 months ago.
The funds supported foreign trade and key agribusiness and IT sectors. Garcia Mora said the IT sector could be a “revolution in this country”, helping to drive Ukraine’s recovery and build back a more innovative and diversified economy.
The IFC will keep its focus on the agribusiness sector, plans to support the banking sector and is eying more long-term projects in infrastructure, he said.
“We have identified, we are working already on a pipeline of $1.5 billion … of companies which we can invest in,” Garcia Mora told Reuters in an interview as he visited Kyiv to mark the re-opening of the World Bank Group’s office in the capital.
“I would like to deliver this $1.5 billion in the next 12 to 18 months.”
Ukraine’s economy has been severely hit by Russia’s invasion, and shrank by about a third last year. While the government relies heavily on Western financial aid to be able to finance its budget and social spending, private companies struggle with affordable access to capital.
Garcia Mora said the banks had enough liquidity but needed support to reduce risks. The IFC was working on risk-sharing products and also sought to provide working capital to smaller businesses via Ukrainian banks, he said.
The lender announced on Friday that it was setting up a 20-million-euro ($22.24 million) risk-sharing facility for Ukrainian branches of OTP Bank and OTP Leasing.
It also said that along with its partner fund Horizon Capital, IFC had invested $5 million in Miratech, IT services and consulting company.
Reiterating the IFC’s commitment to supporting Ukraine’s private sector as the country plans for the post-war reconstruction, Garcia Mora said the biggest potential for private investors was in energy, transport and also agribusiness.
The government and the World Bank estimated in a joint assessment in March that the cost of reconstruction and recovery in Ukraine had reached about $411 billion. Garcia Mora said that about $140 billion could come from private investors.
($1 = 0.8993 euros)
Reporting by Olena Harmash, Editing by Frances Kerry and Timothy Heritage
Our Standards: The Thomson Reuters Trust Principles.
DUBAI, June 20 (Reuters) – Middle East alternative asset manager Investcorp Holding is seeking to raise up to $600 million from the listing of an investment vehicle in Abu Dhabi this year, two sources with knowledge of the matter told Reuters.
Bahrain-based Investcorp is making preparations for a potential public share sale of Investcorp Capital, registered in the Abu Dhabi Global Market, the international financial centre in the capital of the United Arab Emirates.
The vehicle, which will operate as an independent company, will hold Investcorp’s private market co-investments across assets including credit, real estate and private equity, said the sources, declining to be named as the matter is not public.
Investcorp is working with Goldman Sachs (GS.N), First Abu Dhabi Bank (FAB) (FAB.AD), Emirates NBD (ENBD.DU) and HSBC (HSBA.L) on the plan, the people said. Moelis & Co (MC.N) is acting as financial adviser, they said.
Bloomberg in March reported Investcorp was putting together a plan to list the vehicle.
Deliberations are at early stages and no final decision has been taken while the company is also evaluating other listing venues and options for growth.
Investcorp and FAB declined to comment. Goldman Sachs, HSBC, Moelis & Co, and Emirates NBD did not immediately respond to a request for comment.
With $50 billion of assets under management (AUM), Investcorp is best known for listing luxury goods brands, such as Gucci and Tiffany & Co.
Under the leadership of Mohammed Al Ardhi, Investcorp’s current chairman, Investcorp has grown its AUM fivefold over the last seven years by diversifying into sectors including infrastructure, acquiring stakes in other general partners, and insurance.
It has listed two blank check companies on the Nasdaq in the U.S., one with a focus on Europe and the other on India.
The company, which has opened offices in Singapore, Beijing, Mumbai and Delhi in that time, has also diversified its sources of fundraising.
Abu Dhabi state fund Mubadala Investment Company acquired 20% of the firm in 2017.
Reporting by Hadeel Al Sayegh; editing by Jason Neely
Our Standards: The Thomson Reuters Trust Principles.