Another Chinese homebuilder has hit financial trouble after it missed payments on debt obligations, adding to worries over the country's property sector as embattled giant China Evergrande teeters on the brink of collapse.

Fears of contagion through the Chinese economy have grown as Evergrande, the most indebted of the country's private homebuilders, struggles with more than $300 billion in liabilities and heads towards a massive restructuring.

Fantasia Holdings failed to repay a $205.7 million note Monday, the Shenzhen-based company said in a statement.

This came as property management firm Country Garden Services Holdings added that a unit of Fantasia had missed repayment on a 700 million yuan ($108 million) loan, saying it was likely Fantasia would default.

The news comes as investors await news from Evergrande after it suspended trading of its shares Monday pending an announcement on a "major transaction", with reports saying Hong Kong real estate firm Hopson Development Holdings planned to buy a 51 percent stake in its property services arm.

While Fantasia is a smaller player in the market than Evergrande, its struggles highlight investor concerns over companies' financial disclosures.

Fitch Ratings downgraded Fantasia to "CCC-" on Monday, a move that points to default as a possibility.

The ratings agency added in a statement that although media reports said Fantasia missed an earlier payment to bondholders, the bond "does not appear to have been disclosed in the company's financial reports".

"We believe the existence of these bonds means that the company's liquidity situation could be tighter than we previously expected.

"Furthermore, this incident casts doubt on the transparency of the company's financial disclosures," Fitch added.

Separately, S&P Global Ratings has downgraded another Chinese property firm -- Sinic Holdings -- saying its "debt-servicing ability has almost been depleted".

Sinic has been unable to service interest repayments, which could result in "accelerating repayments on Sinic's other debt obligations", S&P said on Monday.

Fitch downgraded Sinic from "CCC" to "C" on Tuesday, reflecting its view that "a default-like process has begun" for the company.

The boss of Shanghai-based Sinic hit the headlines last month when he lost more than a billion dollars in a market meltdown linked to fears about Evergrande.

Zhang Yuanlin saw his net worth drop from $1.3 billion to $250.7 million on September 20, according to Forbes, when his firm was forced to halt trading in Hong Kong following an 87 percent slump in its share price.

China's real-estate sector has been under tightened scrutiny in recent months, with regulators announcing caps for three different debt ratios in a scheme dubbed "three red lines" last year.

Beijing has stayed silent on the travails of Evergrande, but state media has trailed various responses in a nod to the mood towards a private company that grew on a debt binge in the boom years of Chinese real estate.

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only

IMF board meets with law firm behind data manipulation probe
Washington (AFP) Oct 4, 2021
The IMF Executive Board has met with the law firm behind a report that found Managing Director Kristalina Georgieva manipulated data in favor of China while in a senior role at the World Bank, the fund announced Monday. In a brief statement released by IMF spokesman Gerry Rice, the board comprised of 24 directors and the managing director said it "met today with the representatives of the law firm WilmerHale as part of its ongoing review of the matter raised by WilmerHale's investigation of the Worl ... read more