Sunac Says Inadvertent Release by Goldman Causes Cancellation of Bond Sale

An official at Sunac China Holdings Ltd. (1918), which cancelled its first bond sale this month, said Goldman Sachs Group Inc. inadvertently released confidential information regarding the developer’s finances to some investors.

Goldman Sachs was “in charge of marketing materials” for the bond offer and included 2011 financial forecasts in an investor presentation, raising compliance concerns, Feng Yanhong, an investor relations manager for Tianjin-based Sunac, said in a telephone interview from Beijing.

Feng wasn’t authorized to discuss the matter and her comments don’t represent the company’s views, Huang Shu Ping, assistant to Sunac Chief Executive Officer Sun Hongbin, said in an e-mailed comment today. Edward Naylor, a spokesman for Goldman Sachs in Hong Kong, declined to comment, and when contacted by phone Feng said she couldn’t comment further.

Sunac, which builds luxury properties in cities including Beijing and Chongqing, cancelled its bond plans on March 9 and published some 2011 earnings estimates and targets in a filing to Hong Kong’s stock exchange. It fell 3.9 percent when trading was resumed on March 9 after the stock was suspended a day earlier, and fell 2.85 percent to HK$2.39 today.

Sunac said in the filing that its average gross margin would exceed 40 percent this year while total targeted contracted sales may reach 18.3 billion yuan ($2.8 billion). Aggregate land purchase expenses are forecast to be 5.43 billion yuan, while construction expenses may be 7.67 billion yuan.

Gross margins for 2010 were 43.3 percent while total sales were 6.65 billion yuan, according to the company’s annual report, which was published yesterday.

Sunac also hired Deutsche Bank AG and Standard Chartered Plc to help arrange its bond sale and investor meetings. Mark Bennewith, a spokesman for Deutsche Bank in Singapore, declined to comment. Joyce Li, a spokeswoman for Standard Chartered in Hong Kong, also declined to comment.

To contact the reporters on this story: Katrina Nicholas in Singapore at knicholas2@bloomberg.net Andrea Wong in Taipei at awong268@bloomberg.net;

To contact the editor responsible for this story: Will McSheehy at wmcsheehy@bloomberg.net

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