A former top 10 mainland developer disclosed RMB 7.9 billion ($1.2 billion) in fresh defaults today, with China Fortune Land Development saying in a statement on its website that it was working to arrange repayment on a string of debt delinquencies which started in the first quarter of this year.
“At present, the company is actively coordinating matters related to the extension with financial institutions involved in the failure to repay the principal and interest of the debt as scheduled,” CFLD said Tuesday.
The developer controlled by Ping An Insurance, along with its subsidiaries, is now in default on nearly RMB 94 billion in principal and interest on bonds, bank loans and other borrowings.
The latest episode in the Chinese developer debt drama was revealed just one day after the chairman of another cash-strapped mainland builder, Yango Group, offered to trade offshore-bond holders personal-backed notes in return for their dollar-denominated securities.
Under the guidance and support of provincial and municipal governments and a special team, CFLD on 8 October announced a debt restructuring plan, with management communicating with creditors about the scheme’s details.
The latest disclosure comes less than eight months after the top-50 mainland developer revealed a $1.3 billion default on various debt instruments. Just a month before that, CFLD announced $813 million in missed payments after becoming the first major developer to trip over the Chinese government’s “three red lines” for financial discipline.
CFLD in 2020 ranked 45th in contracted sales among China’s top developers at RMB 963 million and 46th in sales area with 510 million square metres (5.5 billion square feet). As recently as 2017 the builder had ranked ninth in China with RMB 146 billion in contracted sales.
In China, the developer is best known for its industrial parks and Hebei province’s Gu’an New Industry City, a concentration of factories, housing, hotels, schools and green spaces south of Beijing.
Mainland insurance giant Ping An became CFLD’s biggest shareholder in September when it increased its stake to 25.19 percent of the developer. But the group’s money woes have continued, as exemplified by last week’s news that Hebei FC, a soccer club owned by CFLD, had put its players on leave after it failed to pay its electricity bills on time.
A rival developer, Shenzhen-listed Yango, on Monday proposed exchanging $747 million in dollar-denominated notes for new notes underwritten by group chairman Lin Tengjiao.
For each $1,000 principal amount of the exchanged notes — with maturities in February 2023, January 2022 and March 2022 — holders would receive $25 in cash, in addition to $1,000 in new securities, Yango said in a filing with the Hong Kong stock exchange.
Developer Modern Land had proposed a similar swap with its creditors last month before scrapping the scheme and defaulting on a $250 million bond.
Yango’s announcement came just two days after financial intelligence provider REDD reported that Yango had asked holders of its asset-backed securities to refrain from asking for repayment for a year, potentially opening a new front in the crisis roiling China’s property sector.