The debt woes of Tianjin Real Estate Group, a developer backed by the government of northeast China’s port city Tianjin, deepened after it defaulted on RMB 215.8 million ($31.3 million) due Wednesday to bondholders, reported Caixin.
It was the company’s first default on public debt amid a long-running struggle to sort out a restructuring plan. As of the end of May, the company also defaulted on nearly RMB 15 billion of bank loans.
Tianjin Real Estate Trust Group, a wholly owned subsidiary of Tianjin Real Estate, failed to repay bondholders principal of RMB 200 million on which investors sought to exercise options to sell bonds back to the company plus interest of RMB 15.8 million, the Shanghai Stock Exchange said Thursday in a statement.
“Tianjin Real Estate is a typical example of real estate-market distortion over the past two years which fueled local land price surge but caused financial woes to themselves,” a Caixin source close to the situation said.