More Chinese Real Estate Groups in Trouble Paying Off Debts

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The debt problem in the Chinese real estate sector is also showing up in other companies. Missed bond payments by the great Evergrande already made it clear that this conglomerate is faltering.

 

Now real estate developer Fantasia Holdings has also exceeded debt payment deadlines.

According to its own statement, Shenzhen-based Fantasia has not repaid a bond of more than 177 million euros, while this term expired on Monday. In addition, a property manager reported that Fantasia did not repay a loan of almost 94 million euros before Monday, even though that was the agreed date.

In recent weeks, holes in the finances of the Evergrande conglomerate, which in addition to real estate also deals with electric cars, for example, have become increasingly apparent. The company could not pay suppliers and missed bond payment deadlines, fueling fears of a domino effect from bankruptcy.

Fantasia fits into Evergrande about five times by revenue, but the issues show that the credit-growth real estate companies are at high risk. For example, real estate company Sinic also received requests for repayment from lenders after missing two debt payment deadlines.

At Evergrande, a deal is reportedly in the works to raise capital. According to Chinese media, industry partner Hopson Development wants to take a 51 percent stake in the company’s real estate branch for 4.3 billion euros.

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