(Yicai Global) Feb. 2 -- China Fortune Land Development, one of the country’s biggest property developers, is negotiating with its creditors after failing to repay CNY5.3 billion (USD813.4 million) in loans due to a cash crunch.

A number of creditors have already agreed to extend the repayment period, the Beijing-based company said in an exchange filing yesterday. The overdue debt may impact operations and financing, it added.

China Fortune Land had held a meeting the same day with debt commissioners Ping An Bank and Industrial and Commercial Bank of China, Yicai Global has learned. Also in attendance were representatives from the Hebei provincial government, China's central bank, the China Banking and Insurance Regulatory Commission, and over 230 financial institutions.

At the meeting, Chairman Wang Wenxue said the developer was not deliberately avoiding repayment and blamed its debt issues on the pandemic, the firm's reckless expansion, and its misjudged assessment of the state of real estate markets around Beijing.

China Fortune Land has been boosting its bond sales since the second half of last year. In July, the firm issued its third perpetual bond in a month. As borrowing rose, profit narrowed. Net profit dropped 25 percent to CNY7.3 billion in the first three quarters of 2020 from a year earlier. Revenue fell 11.8 percent to CNY56.7 billion (USD8.8 billion).

As of Jan. 31, China Fortune Land's capital balance stood at CNY23.6 billion, but almost 97 percent of that was tied to deposits that cannot be quickly released to be allocated elsewhere. 

The developer's short-term debts due within a year totaled CNY94 billion as of Sept. 30, 2020, up almost 56 percent from a year earlier. Its longer-term debts jumped by nearly 34 percent to CNY65.2 billion. It had CNY52.6 billion in bonds payable.

Trading of the company's shares [SHA: 600340] has been suspended since Jan. 28.

Editor: Emmi Laine, Xiao Yi