The company had 23.6 billion yuan in cash on its balance sheet at the end of January, according to Monday’s filing, but much of it, or 22.8 billion yuan, was already earmarked for other purposes and could not be used to repay debts.
At a meeting with creditors Monday, Chairman Wang Wenxue said the company has up to 100 billion yuan in debt coming due this year, sources with knowledge of the matter told Caixin. The default adds to evidence of a brewing debt crisis among aggressive Chinese property developers as regulators step up oversight to curb excessive borrowing that they consider a threat to the country’s financial stability.įor China Fortune, Monday’s disclosure could be just the tip of the iceberg.
It added it was trying its best to raise money, and had reached a consensus with some financial institutions about a repayment delay. The Shanghai-listed company said it has failed to pay 5.3 billion yuan ($813.5 million) in principal and interest on debts that include bank and trust loans, though not bonds, according to a company filing (link in Chinese) released late Monday.Ĭhina Fortune said it couldn’t come up with the cash to make the debt payments due to the current economic and industry conditions coupled with the impact of the Covid-19 epidemic. and its subsidiaries have defaulted on billions of yuan in debt as the property developer has struggled to scrape together cash amid a tightening regulatory environment.
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