Chinese developer Sinic Holdings admitted on Monday that it’s likely it will default on bonds worth $250 million.
The company says it does not have enough financial resources to the make payments by their maturity date, in the latest case highlighting the impact of the China Evergrande Group’s struggles as it tries to deal with $305 billion of debt.
Sinic said in September a creditor had demanded repayment of principal and accrued interest totalling $75.4 million, due to overdue payments on onshore financing, and that the creditor had appointed receivers over the shares of certain offshore units.
The creditor’s enforcement triggered conditions under which other financing arrangements and bonds worth $710 million may become immediately payable if creditors choose to enforce that, the company said.
Sinic said it was talks with lenders and other stakeholders over repayment arrangements. The payment and the last interest payment on the first batch on bonds worth $250 million is due on October 18.
The Shanghai-based developer has total liabilities amounting to $1.01 billion under offshore financing arrangements.
Sinic shares have been on a trading halt since September 20, after plunging nearly 90% earlier that day.
- Reuters with additional editing by Sean O’Meara