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China Properties’ Notes Default As Evergrande Crisis Spreads

The Hong Kong-headquartered company says its controlling shareholder Wong Sai Chung has vowed to back the firm through its liquidity crisis


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Liquidity in the China property sector has become very tight in the past few months. Photo: Reuters

 

China Properties Group has revealed it has defaulted on notes worth $226 million after failing to find the necessary funds by the maturity date.

The Hong Kong-based firm joins a lengthening list of property developers in the country that are reeling from a debt crisis.

The case underscores the impact of China Evergrande Group, which is struggling under $305 billion in debt, on the rest of the high-yield sector as liquidity dries up and sales slow.

 

What Led To The Evergrande Crisis?

 

Earlier this week, Chinese developer Sinic Holdings said it would likely default on bonds worth $250 million.    

China Properties said it had failed to secure funds by October 15, the maturity date of the notes, due to a “timing mismatch” and that it would not be able to make repayments until it had sold or refinanced some of its assets.

The Hong Kong-headquartered company said its controlling shareholder Wong Sai Chung had assured he would continue to provide support to the firm through the liquidity crisis.

For now, the notes would be delisted from foreign bourses, it added.

 

  • Reuters with additional editing by Sean O’Meara

 

Read more:

Evergrande Crisis Deepens Even As Developer Xinyuan Pays Debt

Evergrande Fallout ’Controllable’ Says China Central Bank

 

Sean OMeara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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