Agile’s Chairman placed under custody
Agile Property Holdings Ltd. tumbled the most on record after its billionaire founder and chairman Chen Zhuolin was placed under the control of Chinese prosecutors and amid reports it assisted in money laundering in legal news.
The stock plunged as much as 31 percent to HK$3.30 in Hong Kong after it resumed trading with its shares also downgraded.
“The custody will likely raise concerns about its land bank and business operation” in Yunnan province, where Kunming City is located, Bank of Communications Co. analysts Toni Ho and Alfred Lau said a note today in which they cut their stock recommendation to a sell.
Chen will remain president and chairman since the company doesn’t have any evidence at the moment that Chen’s detention is related to “any lost or misappropriation of funds or assets,” it said.
The company’s $700 million of 8.25 percent perpetual notes, sold to investors at par in January 2013, are trading at 69.5 cents on the dollar to yield 12.636 percent, BNP Paribas SA prices on Bloomberg show. They touched 67.5 cents on Oct. 10, a record low, and were trading at 84.25 cents on the dollar earlier this month before the Chinese website report.
While the chairman’s detention may not breach any existing loan facilities, Agile’s refinancing ability remains a “major concern,” Barclays Plc analysts said in a note yesterday.
“We expect the company to speed up the sales of all its products at bigger discounts,” Alvin Wong and Jianping Chen of Barclays wrote in the note. Its full-year sales target of 48 billion yuan ($7.8 billion) is “unachievable,” they said.
Source: bloomberg- Agile’s Chairman placed under custody
