Shares of YUEXIU PROPERTY (HKG:00123) tumbled 5.23% on Monday, closing at HK$X.XX per share, as investors reacted to the news of its subsidiary securing substantial loans from an undisclosed bank.
According to a filing with the Hong Kong stock exchange, Yuexiu Property's subsidiary Leading Affluence signed up for a HK$500 million revolving loan facility and a HK$3 billion term loan. While these loans could provide the company with additional liquidity, they also come with conditions that may have raised concerns among investors.
One of the conditions stipulates that Yue Xiu Enterprises, the controlling shareholder of Yuexiu Property, must maintain a significant stake in the company. If Yue Xiu's shareholding dips below 30% or ceases to be the largest beneficial shareholder, it could trigger a default event on the loans.
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