A nearly two-thirds plunge in the value of Yuzhou shares have knocked its chairman out of the ranks … [+]
China real estate ex-billionaire Lam Lung On, chairman of Yuzhou Properties, has “recently” bought on the secondary market about $3.55 million of debt issued by the company, Yuzhou said in an announcement this morning.
The purchases come amid concern about cash flow, transparency and defaults in a China real estate industry that is battling high debt and slow sales. Mid-sized developer Fantasia defaulted on $206 million of debt on Oct. 4. (See earlier post.) Investors are awaiting details of a possible investment in Evergrande Property Services that would reduce pressure on China Evergrande Group, the world’s most heavily indebted developer which has also missed payments.
Click here for details of Lam’s purchases. The six bond issues that Lam purchased debt from have combined borrowing of nearly $2.7 billion. Fitch assigned Yuzhou a B+ credit rating last month (see Fitch report here).
Yuzhou’s Hong Kong-traded shares have lost 65% of their value in the past year and nearly half in the past six months, pushing Lam out of the ranks of the world’s billionaires. He was worth $1.1 billion on the 2021 Forbes Billionaires List released in April; today, he’s worth an estimated $800 million, mostly from dividends received over the years.
Lam founded Xiamen-headquartered Yuzhou in 1994. Before founding the company, Lam worked for Xiamen Land Development, a state-owned enterprise.
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