China Aoyuan warns of liquidity crunch, inability to repay $651.2 mln debt

China Aoyuan

02/12/2021 15:54

Dec 2 (Reuters) - China Aoyuan Group  3883.HK  said on
Thursday creditors have demanded repayment of $651.2 million due
to a slew of rating downgrades, and the property developer
warned shareholders that it may be unable to pay up due to a
liquidity crunch.
    Downgrades from rating agencies such as S&P, Fitch and
Moody's over the last two months set off conditions under which
certain offshore loans became immediately payable, the company
said.
    The downgrades were triggered as China's property sector
reels under a liquidity crisis that has fueled growing creditor
concerns about developers' ability to meet their near-term
offshore repayment obligations.
    Evergrande  3333.HK , once China's top-selling developer,
has been stumbling from debt deadline to deadline as it grapples
with more than $300 billion in liabilities. 
    China Aoyuan said on Thursday there was no guarantee it
would be able to fulfill its financial obligations due to the
liquidity issues, and there may be 'material' adverse impact on
its business if it was unable to repay the loans or reach an
agreement with creditors. 
    The company has not reached any agreements for the $651.2
million debt, and warned non-payment may cause acceleration of
other loans where more creditors can demand repayment or enforce
action.
    The development comes as bigger peer Kaisa Group  1638.HK 
looks unlikely to win bondholders' approval to extend the
maturity of a $400 million bond due next week.  urn:newsml:reuters.com:*:nL1N2SN08L
    

 (Reporting by Arundhati Dutta in Bengaluru; Editing by Sriraj
Kalluvila)
 ((Arundhati.Dutta@thomsonreuters.com;))