One of China’s struggling property developers, Yuzhou Group Holdings, is in talks with state-backed investors to take over $548 million in liabilities that are due in April as the ailing company struggles to pay both domestic and international bondholders, reports Caixin. Fujian-based Yuzhou is in talks with state-backed investors with the assistance of local authorities to transfer some of its domestic bonds to new investors, a deal that is likely to offer the cash-drained company one more year to repay the notes.
Yuzhou is among a swath of Chinese developers hit by a market downturn that triggered a cash crunch rattling the industry and sparking a wave of defaults. In early March, Yuzhou missed interest payments on a $500 million dollar bond, the company’s first public default.
Yuzhou’s capital crunch has escalated since December 2021. At that point, the company had 15 outstanding dollar bonds with total value of nearly $5.8 billion, according to the DealingMatrix bond market data platform. The company also had six onshore notes totaling RMB 6.9 billion. Most of the debts are to be repaid in the first and third quarters of 2022.