China Aoyuan warns of cash crunch and inability to repay $ 651.2 million in debt


Dec. 2 (Reuters) – China Aoyuan Group (3883.HK) said on Thursday that creditors had demanded repayment of $ 651.2 million due to a series of downgrades, and the property developer warned shareholders that he might not be able to pay due to crunching liquidity.

Downgrades of rating agencies such as S&P, Fitch and Moody’s over the past two months have put in place conditions under which some offshore loans have become immediately due, the company said.

The downgrades were triggered as China’s real estate industry reeled from a liquidity crunch that has fueled growing concerns from creditors about the ability of developers to meet their short-term offshore repayment obligations.

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Evergrande (3333.HK), once China’s best-selling developer, has stumbled from maturity to maturity as it grapples with over $ 300 billion in liabilities.

China Aoyuan said on Thursday that there was no guarantee that it would be able to meet its financial obligations due to the liquidity problems, and that there could be a “significant” negative impact on its business if it was unable to repay the loans or reach an agreement with the creditors. .

The company has not reached a deal for the $ 651.2 million debt and has warned that non-payment could accelerate other loans where more creditors can demand repayment or take action.

The move comes as the Kaisa Group (1638.HK) is unlikely to seek approval from bondholders to extend the maturity of a $ 400 million bond due next week. Read more

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Report by Arundhati Dutta in Bangalore; Editing by Sriraj Kalluvila

Our Standards: Thomson Reuters Trust Principles.


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