On August 7, R&F Properties released the audited comprehensive annual results announcement for 2021. Its 2021 annual report was almost five months overdue. 

The report shows a loss of about $2.4 billion and a default of $4.4 billion.

According to the report, in 2021, R&F Properties grossed $17.7 billion, a year-on-year decrease of more than 13%. In addition, operating income was $11.2 billion, a year-on-year reduction of 12%.

At the end of March, the company announced a loss of $1.3 billion. However, on August 7, the report showed a loss of about $2.4 billion, more than $1.1 billion over the same period last year. R&F Properties said such a significant loss was affected by asset impairment.

The report also pointed out huge debt figures. For example, the interest-bearing debt is about $20.3 billion, of which $10.3 billion is short-term debt. In comparison, cash is only $3.1 billion—a shortfall of more than $7.2 billion.

Lixin Dehao Certified Public Accountants said that R&F Properties has about $4.4 billion in bank defaults.

R&F sold Guangzhou R&F International Airport Integrated Logistics Park to settle liquidity. Two major shareholders, Li Silian and Zhang Li, also provided interest-free financial support for the company.

Moreover, to ease the pressure, R&F seeks debt extension with creditors. Reports say there are $4.9 billion of senior notes (due in 2025, 2027, and 2028), with the option to pay interest in kind for the next two years.

Li Silian said, “This is a difficult 2021. Our peers and we have been forced to quickly adapt to the sudden changes in the market and financing conditions that we have relied on for decades.”

However, their efforts are almost in vain. For the first half of 2022, R&F’s sales totaled $3.9 billion, continuing to decrease by nearly 60% from last year. R&F said it would continue to sell assets to support immediate liquidity needs.

As of 2021, R&F has 93 hotels in operation. After the Covid outbreak, hotel operations bore the brunt. Likewise, R&F’s main property development business has also recorded losses.

Under the impact of debt accumulation and difficulties in making sales, R&F can only rely on seeking debt extension and asset sales to save itself.

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