Loosening of real estate-related companies’ financing are unfounded and the relevant regulatory bodies are deeply dissatisfied with this incident

Loosening of real estate-related companies’ financing are unfounded

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本文来源于中国网　2013年07月01日 14:30我要评论（0）

more media reports emerged that the news on re-commencing real estate-related companies refinancing policies were unfounded, and the relevant regulatory bodies are deeply dissatisfied with this incident JRJ reported from media reports claiming that listed companies with a real estate business may have their financing channels conditionally loosened, and reportedly this new policy was already approved by China SecuritiesRegulatory Commission (CSRC) chairman Xiao Gang. However, more media reports then emerged which denied that claim, and reported that the relevant regulatory bodies were deeply dissatisfied with this incident, and may conduct investigations into how such claims came to be. Previously, 21st Century Business Herald reported on various comments made by a high-level management of a listed company with real estate business,who said that for refinancing and restructuring policies for listed companieswith real estate businesses had shown some signs of loosening. According to him, after liaising with relevant officials from SCRC, he discovered that previously when a real-estate related company wishes to restructure andchange its business into other industries/sectors, it must first be stripped of allreal estate development business before the application for businessrestructuring can even be submitted, but under the new policies applications can be made even if the company hadn’t yet completely stripped of its real estate business. Another point of focus is that, once these restructuring guidelines arecompleted, length of restructuring applications will be significantly shortened from at least a few months to only one to two months. In addition, the management personnel was quoted saying that he found a case where a listed developer had obtained approval for restructuring into another industry/sectorwithout first stripping itself away from its real estate development business.JRJ reported that in May 2013 similar media reports emerged on recommencing of real estate financing, at that time some listed companies with real estate development business and developers had made announcements on refinancing to raise capital for its non-property development businesses or acquisition of Class 1 development projects, implying that in the future these enterprises maybe able to raise capital for their non-property businesses or acquisitions as these do not constitute direct real estate financing.

However, others were not convinced claiming that the prospect of looseningfinancing conditions for real estate-related companies are not positive as it’s not in line with China’s current economic conditioning policies, and if enterprises had more channels to access funds then controlling home priceswill only become increasingly difficult. Eventually, more media reports emerged that the news on re-commencing real estate-related companies refinancing policies were unfounded, and the relevant regulatory bodies are deeply dissatisfied with this incident, and may conduct investigations into how such claims came to be.