(Yicai Global) Sept. 10 -- Shares of Central China Real Estate jumped after the troubled property developer said it can pay its short-term debts despite the impact of recent large-scale floods.

CCRE's stock price [HKG: 0823] rose 6.3 percent to CNY1.68 (30 US dollar cents) today after sliding 5.4 percent yesterday.

The regional government has responded positively to the company’s call after it sent a letter to ask for help as the firm's operations have been hit hard by the record floods in central China, the Zhengzhou-based firm's Chief Executive Wang Jun said at a press conference yesterday.

A screenshot of the letter was circulating online yesterday, indicating that many of CCRE's projects were closed or suspended because of the disastrous floods in Henan province in July and the Covid-19 epidemic. The document showed that the firm has more than CNY5 billion (USD775.5 million) in losses due to its widening operating costs and declining sales.

The figure of CNY5 billion is not exaggerated, said Wang. However, most of CCRE's business has returned to normal, according to the CEO. The company's bank loans have not been affected, so it can manage the risk of maturing debts, bearing no debt repayment pressures in the short term, he added.

CCRE has found financing solutions as it intends to use its own funds to repay debts of USD400 million due in November, said Wang. Another deadline is in August 2022 to repay USD500 million.

The firm's balance of cash and cash equivalents was CNY18 billion (USD2.8 billion) as of Aug. 31. The balance is expected to reach CNY20 billion by Sept. 30, and unrestricted cash may tally three-quarters of the total, said Chief Financial Officer Ma Cheng.

The property developer will continue to reduce its debts and maintain a certain amount of cash flow this year, according to Ma. It will further lower its borrowing costs through debt swaps, the CFO added.

CCRE's total interest-bearing liabilities fell to CNY28 billion in the first half of this year from CNY31 billion as of Dec. 31, 2020, said Ma. Its debt-to-asset ratio (excluding advance receipts) stood at 87.2 percent as of June 30, 2021, much higher than the 70 percent standard set by regulators.

Editor: Emmi Laine, Xiao Yi