By Bingyan Wang
Central China Real Estate’s shares jumped in Hong Kong trade on Monday morning after the developer said it would halt offshore debt payments in a bid to bolster liquidity and maintain operations amid deteriorating sales and market conditions.
The Hong Kong-listed Chinese real estate developer rose 9.4% to HK$0.14 (US$0.02), helping lift investor sentiment toward other Chinese developers. The Hang Seng Mainland Properties Index advanced 0.3%, bucking the 0.5% decline in the benchmark Hang Seng Index.
The company said Friday in an exchange filing that it is unable to make payment on 7.75% senior notes due 2024, citing the “deteriorated” monthly sales since the second quarter and “exacerbating” liquidity constraints.
“The pressure on overseas payment has continued to increase,” Central China Real Estate said, adding that it will halt payments to all offshore creditors “to ensure fair treatment.”
China’s home prices continued to fall in May amid ebbing demand and a lack of home buyers’ confidence in the growth of property prices.
Beijing last year launched rescue plans for the property sector, which included the easing of purchasing curbs, lowering of mortgage rates and broadening of financing channels for developers. However, these measures have yet to effectively shore up the embattled sector.
Write to Bingyan Wang at [email protected]
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