Chinese developer Fantasia misses $ 206 million repayment, exacerbating China’s real estate problems
- Fantasia Holdings, a Chinese real estate developer, failed to repay $ 206 million in loans on Monday.
- Just two weeks ago, the president of Fantasia said the company had no liquidity issues.
- The default indicates that real estate giant Evergrande is not alone in battling a mountain of debt.
Chinese real estate developer Fantasia Holdings failed to repay the payment of a $ 206 million bond due on Monday, the company said, just two weeks after saying it had failed
The missed payment adds to the already immense pressure on China’s real estate industry, which has been exposed to the $ 305 billion credit crunch from real estate giant Evergrande, the world’s most indebted company.
Fantasia is worth $ 415 million, Reuters reported, a drop in the ocean compared to the Evergrande crisis. But its default is contributing to fears that an imminent major collapse in the Chinese real estate market could destabilize the entire Chinese economy.
Shenzhen-based Fantasia is involved in the development of approximately 127 million square feet of land and is managing a total of 47 projects – mostly mixed-use residential and commercial – as of June, according to its Interim report 2021.
It took a senior bond worth $ 500 million in 2016 that was due this year, the company said in a Monday exchange deposit. But when the deadline came, he still had $ 206 million in unpaid reimbursement, he said.
“The board of directors and management of the company will assess the potential impact on the group’s financial and cash position under the circumstances,” the statement said.
On the other hand, the president of Fantasia, Pan Jun said two weeks ago that its “operating performance is good with sufficient working capital and no liquidity problems”.
Meanwhile, one of Fantasia’s subsidiaries failed to repay a separate $ 108 million loan that was also due on Monday, Country Garden Holdings, China’s largest real estate developer, said. by Bloomberg.
Fitch Ratings too reported that Fantasia had taken on $ 150 million in bonds, but the developer did not appear to disclose it in its financial statements. The credit rating agency downgraded its rating of Fantasia from “B” to “CCC”, meaning the real estate company has substantial credit risk and could default.