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China evergrande
Fitch downgrades China Evergrande, flags ‘probable’ default
8 September 2021, 1:17 PM

Fitch Ratings cut the ratings of China Evergrande Group and two of its subsidiaries on Wednesday, the latest in a series of downgrades targeting the property firm over its struggles to restructure huge debts.

Regulators have warned that Evergrande’s 1.97 trillion yuan ($304.79 billion) of liabilities could spark broader risks to the country’s financial system if not stabilised.

Fitch said in a statement that it had downgraded the long-term foreign-currency issuer default ratings of Evergrande and subsidiaries Hengda Real Estate Group Co and Tianji Holding Ltd to CC from CCC+. Fitch defines a CC rating as indicating “very high levels” of credit risk.

Fitch also downgraded the senior unsecured ratings of Evergrande and Tianji, as well as the rating on Tianji-guaranteed senior unsecured notes issued by Scenery Journey Limited to C from CCC.

“The downgrade reflects our view that a default of some kind appears probable. We believe credit risk is high given tight liquidity, declining contracted sales, pressure to address delayed payments to suppliers and contractors, and limited progress on asset disposals,” Fitch said.

Fitch said it saw few signs of progress in the sale of Evergrande’s property management business, Evergrande Property Services Group and its new-energy vehicle business China Evergrande New Energy Vehicle Group Ltd, and cautioned there was “significant execution risk” surrounding their disposal. It said that raised the possibility of default on offshore bond interest payments.

While Evergrande does not have any bonds maturing in 2021, Fitch estimated that it faces bond interest payments of $129million in September alone and $850 million before the end of the year.

The company has also been struggling with payments to suppliers. On Tuesday, a stock exchange filing showed that Evergrande had outstanding liabilities worth 562 million yuan to a supplier, Skshu Paint Co Ltd, as of the end of August.

Evergrande had repaid overdue debts to Skshu worth 234.74million yuan, but 219.5 million yuan of those repayments were in the form of apartments in three unfinished property projects, the filing showed.

In the latest indication of the company’s funding challenges, financial information provider REDD reported on Wednesday that the company would suspend interest payments due on loans to two banks on Sept. 21, citing sources briefed by banks.

The company has delayed payments to several trust firms and may suspend all payments on its wealth management products starting Sept. 8, REDD reported.

Evergrande did not immediately respond to a Reuters request for comment.

The company’s failure to pay some commercial paper on time in June triggered a sell-off in its shares and bonds, and a growing number of suppliers have filed lawsuits to recover overdue payments.

China’s central bank last month summoned Evergrande’s senior executives and issued a rare warning that the company needs to reduce its debt risks and prioritise stability.

STRING OF DOWNGRADES

Fitch’s downgrade follows downgrades from Moody’s Investors Service and domestic rating agency China Chengxin International(CCXI) in recent days.

Evergrande’s shares fell as much as 3.08% in early trade on Wednesday before ending 3.92% higher – though they remain down nearly 15% for the month. Evergrande Property Services rose 0.8%and Evergrande New Energy Vehicle plunged 14.05% on Wednesday.

Evergrande’s offshore bonds fell in afternoon trade in Asia, with data provider Duration Finance showing the mid-price on its June 2025 bond down two cents at 24.506, though some investors smelled opportunity.

“Investors are just impatient and sold,” said a Hong Kong-based portfolio manager. He said that he viewed 26 cents as a “good entry point” for the 2025 bond.

The price of Evergrande’s Shenzhen-traded May 2023 bond slipped 2.86% to 34 yuan.

The bond’s price has fallen nearly 50% since the CCXI downgrade last week made the company’s onshore bonds ineligible for use as collateral in repo financing transactions.

Fire
North West Health Department confirms fire at Christiana Provincial Hospital
8 September 2021, 12:09 PM

The North West Health Department has confirmed that a fire has broken out at the Christiana Provincial Hospital on Wednesday morning. Health department Spokesperson, Tebogo Lekgethwane, says no casualties have been reported.

“There is indeed fire that erupted at Christiana hospital in the Dr Ruth Segomotsi Mompati. At the moment, we do not as yet know what caused the fire, the value of the damage and which parts of the hospital are damaged, but the MEC Madoda Sambatha will be visiting the hospital today at around 1 o’clock to assess the impact and he will receive a report from the facility management.”

Police confirm fire at the Mmabutho hotel

Earlier, North West police confirmed that there’s a fire at the Mmabatho Palms Hotel in Mahikeng. The blaze at the 45-year-old hotel started on Wednesday morning.

The extend of the damage to the hotel has not yet been established but it is reported that some guests are being sent to a nearby hotel.

Provincial police spokesperson Sabata Mokgwebone says, “We can confirm that our members together with firefighters are at Mmabatho Palms Hotel that caught fire earlier this morning. At this stage, the cause of the fire and other details are still unknown.”

Deputy Minister of Agriculture Capa bemoans emergency evacuation process at Mmabatho hotel following fire
8 September 2021, 10:14 AM

Deputy Minister of Agriculture Zoleka Capa has bemoaned a lack of emergency evacuation processes at the Mmabatho Palms Hotel in Mahikeng in the North West.

The hotel caught fire in the early hours of Wednesday morning.

Capa who was a guest at the hotel had to flee from her room wearing her nightgown.

“Is the worst in my life. Round about half-past-one I felt there was more heat and when I actually removed the blankets on my head and I could see some too much light and there was smoke all over and I ran out and started shouting fire, guys get out fire, there is fire. There was no security in place. No one giving us directions, we did not know where the assembly point will be. It was just a mess.”

The extend of the damage to the hotel has not yet been established but it is reported that some guests are being sent to a nearby hotel.

Provincial police spokesperson Sabata Mokgwebone says, “We can confirm that our members together with firefighters are at Mmabatho Palms Hotel that caught fire earlier this morning. At this stage, the cause of the fire and other details are still unknown.”

Mmabatho Palms gutted by fire

 

 

Mohamed Abdullahi Mohamed
Somalia’s President appoints new head of intelligence
8 September 2021, 8:56 AM

Somalia’s President Mohamed Abdullahi Mohamed has appointed a new head of intelligence, intensifying a row with the Prime Minister.

The rift between the President and Prime Minister Mohammed Hussein Roble threatens to derail an indirect election of lawmakers and the President.

On Monday, Roble suspended Fahad Yasin, the Director of the National Intelligence Service Agency saying his report on the murder of one of its agents had been unsatisfactory.

Mohamed, who called the Prime Minister’s move unconstitutional, designated Yasin Abdullahi Mohamed as the new acting head of the agency.

Roble accused the President of interfering with the investigation of the unsolved murder of the agent.

Fire fighters
Police confirm fire at the Mmabatho Palms Hotel in Mahikeng
8 September 2021, 8:26 AM

North West police have confirmed that there’s a fire at the Mmabatho Palms Hotel in Mahikeng. The blaze at the 45-year-old hotel started on Wednesday morning.

The extend of the damage to the hotel has not yet been established but it is reported that some guests are being sent to a nearby hotel.

Provincial police spokesperson Sabata Mokgwebone says, “We can confirm that our members together with firefighters are at Mmabatho Palms Hotel that caught fire earlier this morning. At this stage, the cause of the fire and other details are still unknown.”

Mmabatho Palms gutted by fire

 

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