Two subsidiaries of Chinese property developer Tahoe Group have been granted a more than 3.5 year extension to pay back RMB 12 billion ($1.8 billion) of debt, as the parent company struggles with a mounting debt crisis, reported Caixin.
The creditor, the Shenzhen unit of state-owned China Great Wall Asset Management, has agreed to extend the repayment deadline from April this year to December 2023, according to a Tuesday stock exchange filing. As part of the extension agreement, Tahoe pledged to guarantee the liabilities of the subsidiaries, Shenzhen Tahoe Property Development and Shenzhen Zhongweijingshan Property Development, for no more than RMB 16 billion, it said in the filing to the Shenzhen bourse, reported Caixin.
Tahoe, a Fujian province-based privately owned real estate company, has been caught in a crisis of mounting financial losses and debt. The company had already defaulted on six bonds and missed repayments amounting to RMB 48.7 billion in debt and RMB 6.5 billion of interest as of Oct. 24, as its business faced headwinds amid the fallout of the Covid-19 pandemic and tightened oversight on the property industry.