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Chinese developer missed payment, adding burden to the industry

BEIJING (AP) – A midsize Chinese real estate developer failed to make a $ 205.7 million payment to bondholders on Tuesday, adding to the financial strain on the industry as one of the largest Chinese developers tries to default in Avoid billions.

Fantasia Holdings Group announced in a statement issued by the Hong Kong Stock Exchange that it missed payment. It did not make a statement, but said it had requested that trading in Fantasia shares be suspended.

Some Chinese developers are struggling to repay debts after regulators tightened restrictions on the use of borrowed money last year. This is fueling fears of possible defaults and turbulence on the financial markets.

Investors fear the Evergrande Group could collapse with 2 trillion yuan ($ 310 billion) in debt. The company has missed at least one payment to bondholders abroad but has not yet defaulted.

Economists say Beijing can prevent a wider credit crunch if Evergrande defaults, but wants to avoid bailing out the company or its creditors as a warning to other borrowers and lenders to be more disciplined.

Fantasia, valued at $ 415 million by the exchange, reported earnings of 153 million yuan ($ 24 million) for the first half of 2021 and said sales rose 18.5% year over year to 10 , 9 billion yuan ($ 1.7 billion).

Hundreds of smaller Chinese developers have gone bankrupt since regulators began tightening scrutiny over the industry’s funding in 2017 as they worried about rising debt and the possible risk of a financial crisis.

In March, another developer, Fortune Land Development Co., said it had missed interest and debt payments totaling 5.3 billion yuan ($ 813.5 million).

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