Glorious Property Bondholders Said to Seek Legal Advice

  • Debentures due next month plunge to 65.5 cents on the dollar
  • Company is selling assets, negotiating with lenders about debt

Bonds of Glorious Property Holdings Ltd. plunged after people with knowledge of the matter said noteholders have begun approaching law firms to prepare for a possible restructuring of its debt.

The company’s $300 million of 13 percent notes due Oct. 25 dropped 5.88 cents, the most since July 21, to 65.5 cents on the dollar as of 6:40 p.m. in Hong Kong, Bloomberg-compiled prices show. Its 2018 notes fell 0.375 cents to 53.755 cents on the dollar. No law firms have been hired yet, the people said, asking not to be identified because the details are private.

Glorious Property is selling assets and negotiating with lenders after falling behind in servicing 10.5 billion yuan ($1.65 billion) of loans. The Shanghai-based developer had failed to pay 1.82 billion yuan of principal and interest on 5.4 billion yuan of debt as of June 30 when it consolidated its first-half results, according to an Aug. 31 Hong Kong stock exchange filing.

Doris Chung, a spokeswoman at Glorious Property, couldn’t immediately be reached for comment. A spokeswoman at the company’s external public relations firm declined to comment.

Moody’s Investors Service and Standard & Poor’s have flagged bond default risks this year after downgrading Glorious Property’s notes in April. The developer is controlled by tycoon Zhang Zhi Rong, who’s making a second attempt to take it private.

Glorious Property’s $400 million of 13.25 percent 2018 debentures were little changed at 54.13 cents on the dollar.

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