(Yicai Global) Jan. 20 -- China Aoyuan Group will not be able to repay four US dollar senior notes worth USD1.08 billion that are due between this month and June 2024, the troubled Chinese property developer said yesterday, adding that it will enter restructuring in order to find a way out of its liquidity crunch.

Aoyuan is unable to pay off the aggregate principal of two notes amounting to USD688 million due today and on Jan. 23, the developer said in a filing to the Hong Kong stock exchange yesterday. The other two notes will mature in June 2023 and June 2024 and are unlikely to be honored.

Guangzhou-based Aoyuan is working closely with professional advisers to present a debt restructuring proposal to its creditors and other stakeholders as soon as possible, it said.

The company, which had racked up debts of CNY262.8 billion (USD41.4 billion) as of June last year, has been desperately trying to offload assets to raise funds. Last month it sold property in Hong Kong worth HKD900 million (USD115.6 million) and is said to be talks to sell real estate in Canada and Australia.

"The continued market downturn and the dampening of purchasers' confidence have caused difficulties for the group to realize its inventories and dispose of its assets on reasonable terms," the firm said.

Overseas creditors began to tighten the noose on Chinese developers’ borrowings after Fantasia Holdings defaulted on a USD206 million dollar bond in November last year. US credit rating agency Fitch Ratings downgraded Aoyuan’s rating that month, causing creditor after creditor to request early repayment.

The firm had USD3.2 billion in outstanding offshore bonds as of yesterday, according to financial data provider Wind.

Aoyuan's shares [HKG:3883] closed up 3.16 percent at HKD1.63 (USD0.21). The stock has lost 80 percent of its value since June last year.

Editors: Tang Shihua, Kim Taylor