HONG KONG • CWT International, controlled by HNA Group, failed to pay interest on a HK$1.4 billion (S$242 million) facility, prompting lenders to demand immediate repayment of the loan, it said yesterday.
The Hong Kong-listed company will have to make good on the payment by 9am today to prevent lenders from taking action, it said in a statement to the Hong Kong Stock Exchange.
Failure to settle the loan by then will allow the creditors to take possession of all charged assets, including its shareholding of subsidiary CWT, properties in Britain and the United States, and golf courses in China, it said. The charged assets represent a "vast majority" of its total assets, which stood at HK$24.6 billion as of the end of last year.
CWT International's parent HNA Group was one of China's most acquisitive firms until it began facing liquidity challenges and pressure from the government. It has agreed to sell over US$25 billion (S$34 billion) of assets, ranging from property to big shareholdings, since last year. Despite that, it still struggles to repay its debt. The group repaid a local note after a delay last month.
CWT International, engaged in logistics and financial services, has been actively negotiating with the lenders to work out other arrangements for the repayment due under the facility agreement, it said. But the default led to a cross default under a term loan facility, which has about HK$766 million outstanding, it said. Trading in CWT International shares remained suspended.
CWT, a unit under CWT International, has a $100 million note due tomorrow and a bond of the same amount due next March, according to data compiled by Bloomberg. An auditors' report contained in CWT International's 2018 annual results said there could be "material uncertainties" within the firm that "may cast significant doubt on the group's ability to continue as a going concern".
"We hold the view that CWT will pay its Singapore dollar bonds due on April 18 as CWT holds assets and has ongoing businesses," said OCBC Bank credit analyst Ezien Hoo. "But its parent defaulting may complicate the process and there may be delays."