Chinese developer misses payment, exacerbating tensions in industry
BEIJING (AP) – A mid-sized Chinese real estate developer failed to make a $ 205.7 million payment owed to bondholders on Tuesday, adding to financial pressure from the industry as one of the largest major Chinese developers are trying to avoid the default of billions of dollars in debt.
The Fantasia Holdings group announced that it had missed the payment in a statement issued via the Hong Kong Stock Exchange. He gave no explanation but said he requested the suspension of trading in Fantasia shares.
Some Chinese developers are struggling to repay their debt after regulators tightened limits on the use of borrowed money last year. This is fueling fears of possible defaults and financial market turmoil.
Investors fear that the Evergrande group will collapse with a debt of 2,000 billion yuan (310 billion dollars). The company has missed at least one payment to foreign bondholders but has not yet been declared in default.
Economists say Beijing can prevent a broader credit crunch if Evergrande defaults, but wants to avoid bailing out the company or its creditors to warn other borrowers and lenders to be more disciplined.
Fantasia, valued by the stock market at $ 415 million, reported a profit of 153 million yuan ($ 24 million) for the first half of 2021 and said its revenue increased 18.5 percent from the previous year. ‘previous year to reach 10.9 billion yuan ($ 1.7 billion).
Hundreds of small Chinese developers have gone bankrupt since regulators began to tighten control over industry funding in 2017 over concerns about rising debt and the possible risk of a financial crisis.
In March, another developer, Fortune Land Development Co., said it had not paid interest and debt totaling 5.3 billion yuan ($ 813.5 million).