Chinese developer Fantasia misses $ 206 million in repayment, adding to China’s property problems

  • Fantasia Holdings, a Chinese real estate developer, on Monday failed to pay $ 206 million in loans.
  • Just two weeks ago, Fantasia’s chairman said the company had no liquidity issues.
  • The standard indicates that real estate giant Evergrande is not alone in fighting a mountain of debt.

Chinese real estate developer Fantasia Holdings failed to repay a $ 206 million bond payment on Monday, the company said, just two weeks after it said it had no

liquidity
problems.

The unpaid payment increases the already huge strain on China’s real estate sector, which has been hit by the $ 305 billion credit crunch from real estate giant Evergrande, the most indebted company in the world.

Fantasia is worth $ 415 million, Reuters reported, a drop in the ocean compared to the Evergrande crisis. But its bond standard contributes to fears that an impending major collapse in China’s real estate market could destabilize the entire Chinese economy.

Fantasia, based in the city of Shenzhen, took out a $ 500 million senior-note bond in 2016 due this year, the company said in a Monday stock exchange announcement. But when the deadline came, it still had $ 206 million of repayment left, it said.

“The board of directors and management of the company will assess the potential impact on the group’s financial condition and liquidity under the circumstances,” the statement read.

On the other hand, Fantasia chairman Pan Jun said two weeks ago that its “operating results are good with sufficient working capital and no liquidity problem.”

Meanwhile, one of Fantasia’s subsidiaries failed to repay a separate $ 108 million loan, which was also due Monday, according to Country Garden Holdings, China’s largest real estate developer, according to Bloomberg.

Fitch Ratings also reported that Fantasia had taken $ 150 million in bonds, but the developer did not appear to disclose this in its accounts. The credit rating agency downgraded its rating of Fantasia from “B” to “CCC”, meaning the real estate company has significant credit risk and possibly defaults.

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