News of the company’s financial difficulties came on the same day China’s second biggest developer Evergrande faced another debt repayment deadline, this time for about $148 million in interest payments on US dollar-denominated bonds, according to Refinitiv data. Evergrande did not immediately respond to a request from CNN Business for comment.
Last week, its shares were suspended amid reports that a rival Chinese developer was preparing to buy its property management business.
China’s property sector has grown rapidly in recent years, helping to power economic growth. The sector accounted for 29% of outstanding loans issued by Chinese banks in yuan in the second quarter of 2021. Including related industries, it now accounts for around 30% of GDP.
Last year, the Chinese government started reining in the real estate sector to curb excessive borrowing to prevent the market from overheating. Beijing has since made it clear that it wants to tame runaway home prices, which it has blamed for worsening income inequality and threatening economic and social stability.
— Laura He and Michelle Toh contributed to this report.