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Financials

Sunac shares tumble as much as 13.5 pct on credit risk concerns

SHANGHAI/HONG KONG, July 18 (Reuters) - Shares of Chinese property developer Sunac China Holdings Ltd tumbled as much as 13.5 percent on Tuesday after a local media report said banks were looking at the company’s credit risks after a major deal with rival Dalian Wanda Group.

Sunac announced a deal last week to buy tourism projects and hotels in the country from Dalian Wanda in a $9.3 billion deal, one of China’s largest property deals. A large part of the deal would be funded by new debt.

The share price drop came after Chinese regulators told banks to stop providing funds for several of Dalian Wanda’s overseas deals as Beijing looks to curb the group’s offshore buying spree, sources told Reuters on Monday.

The shares had gained some ground by mid-afternoon trading and closed down 7.3 percent to HK$15.94, in line for their biggest one-day percentage decline since January.

Sunac’s bonds due 2019 fell 6 points to around 99 cents on the dollar.

A report by Chinese publication Jiemian.com, citing unnamed sources, said earlier on Tuesday that some banks were reviewing risks associated with extending credit to Sunac, and halting some loans extended to the developer.

Responding to the report, Sunac Chairman Sun Hongbin told Tencent Finance News the company confirmed banks have started reviewing the company after its deal with Wanda. Another publication, China Business Journal, reported Sun said Sunac was in communication with the company’s lenders.

“This is very normal; many of the banks have business with us and Wanda, they have to pay attention,” Sun was cited as saying.

Sunac did not give an immediate comment on Sun’s statements when contacted by Reuters.

Sun was elected on Monday to the board of directors of Leshi Internet Information & Technology Corp Beijing, the listed unit of embattled LeEco, into which Sunac has invested $2.2 billion. (Reporting by Adam Jourdan; Additional reporting by Clare Jim and Umesh Desai in Hong Kong; Editing by Christian Schmollinger)

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