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Chinese real estate developer Sunshine 100 reports payment difficulties

2021-12-06T13:04:46.345Z


The Chinese real estate developer Sunshine 100 cannot service a loan. There is also worrying news from the ailing industry giant Evergrande.


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Workers between apartment buildings in Beijing (archive image)

Photo: WILSON CHU / REUTERS

After the Evergrande mega-corporation, another Chinese real estate developer has admitted problems servicing a large loan.

In a statement to the Hong Kong Stock Exchange, Sunshine 100 China Holdings announced that it had had to wait until the previous day to repay around $ 170 million plus interest.

The background is "liquidity problems" due to "unfavorable effects of several factors, including the macroeconomic environment and the real estate market," according to Sunshine 100. Talks with creditors about debt rescheduling or other solutions are ongoing.

Sunshine 100 has already had problems servicing its loans on time in the past.

According to information from financial news agency Bloomberg, the company is now in arrears with $ 385 million.

Sunshine 100 is not one of the particularly significant corporations in China. However, the company's problems are an expression of the crisis that the Chinese real estate industry is currently experiencing. At the center is Evergrande, the country's largest developer. On Friday, the completely over-indebted group had again warned of a default, company founder Xu Jianyin was then called in by the government of the Guangdong province, where Evergrande is based.

After years of credit-financed expansion, Evergrande is sitting on debts equivalent to around 260 billion euros and has great difficulties servicing its loans.

A subsidiary of Evergrande would have to pay $ 82.5 million by this Monday, according to Bloomberg.

The important Evergrande rival Kaisa is also threatened with bankruptcy.

According to insiders, Evergrande also wants to include its US dollar bonds in the restructuring of its credit burdens.

The company and its Scenery Journey division issued these papers, Bloomberg reported, citing insiders.

If the company fails to pay interest on two Scenery Journey bonds this Monday, Evergrande could default on the market for the first time.

Evergrande's share price fell 19.6 percent by the time the Hong Kong market closed on Monday.

The Sunshine 100 share collapsed by more than 14 percent by the end of the market.

Central bank speaks of an individual case

The central bank attributes Evergrande's problems primarily to "mismanagement and breakneck expansion."

It is an "isolated case" that will have little impact on the market.

With the announcement, the central bank sought to allay concerns about contagion, effects on the housing market and similar practices by other real estate groups.

Against the background of the crisis and the economic headwind for the second largest economy, the Chinese central bank gave the banking industry more air to breathe.

It announced that it would lower the rates for reserves that financial institutions must hold for security purposes.

The minimum reserve ratio is expected to drop by 0.5 points to 11.5 percent by December 15.

This would free up liquidity of around 1.2 trillion yuan.

How China's economy will fare in the New Year is the focus of longer-planned deliberations that the Communist Party's Politburo met on Monday.

It is expected that the target for growth in 2022 may only be around five percent or a little more.

For this year, »more than six percent« was aimed for.

dab / AFP / dpa

Source: spiegel

All business articles on 2021-12-06

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