Key Sentence:
- In a statement that is likely to raise new concerns about the financial health and transparency of China’s real estate industry.
- Developer Fantasia Holdings said late Monday it had not paid its $206 million debt that day.
- “The company did not make the payment that day,” Fantasia said in a statement.
The previous Monday, Fitch Ratings downgraded Fantasia from “B” to “CCC. After media reported that Fantasia had lost its $100 million bonds that matured on September 28. “The bonds are guaranteed by the company but do not appear to be disclosed in the company’s financial statements,” Fitch said.
“We believe that the existence of these bonds can make the company’s liquidity more difficult than we previously thought. Late payments also cast doubt on the company’s ability to meet its due dates. In addition, this incident put the transparency of the company’s financial statements. in question.”
“At the time of writing, Fitch was unable to determine whether Fantasia had transferred funds to repay the US dollar bonds maturing on October 4, 2021.
Therefore, failure to collect the bonds would result in a further negative rating.”
After taking down Fitch earlier, Fantasia said it defaulted on its debt on October 4. Fitch noted that the company has $1.9 billion in foreign bonds and $6.4 billion in domestic debt that could be imported by the end of 2022.
Fantasia’s problems stem from the fact that China Evergrande Group, the world’s most indebted real estate developer with over $305 billion in debt. Defaulted on its creditors, rattling capital markets around the world. Trading in Hong Kong shares in China Evergrande and its services complements Evergrande Property Services.
Which was suspended in Hong Kong on Monday over reports that developer China Hopson Development. Controlled by billionaire Chu Mang Yee, had sold $5 billion to invest in Evergrande Services. Hong Kong’s primary Hang Seng index fell 2.2 percent on Monday, its lowest level in almost a year. (See the relevant post here.)
Fantasia shares were suspended on the Hong Kong Stock Exchange on September 29.