(Yicai Global) Feb. 21 -- Yango Group said it is in danger of defaulting on debt as the Chinese homebuilder has little in the way of cash on hand because of the impact of tighter regulation, financing difficulties, and the nation’s cooling real estate market.

Yango has disposable funds of less than 1 percent of its book capital, the Fuzhou-based firm said on Feb. 18. It had cash and cash equivalents of just CNY27.2 billion (USD4.3 billion) as of September along with fixed assets of CNY311.2 billion, which cannot be converted easily to cash.

Shares of Yango [SHE: 000671] edged up 1.1 percent today to finish at CNY2.72 (43 US cents) apiece, giving the company a market value of CNY11.1 billion (USD1.75 billion). The stock has declined 35 percent since October, when Yango began to run into liquidity problems.

The developer has CNY61.4 billion (USD9.7 billion) of debt to repay over the next two years, it said, and is likely to come under pressure from creditors to repay loans in advance as the company’s credit rating crumbles. It has cut prices to speed up payment collection, it added.

Amid a cooling market, Yango achieved less than 80 percent of its sales target last year and the firm is bracing for a 2021 loss of up to CNY5.8 billion (USD915.5 million), it said on Jan. 28. That is a far cry from sales of CNY218 billion (USD34.4 billion) in 2020, which made it one of China’s top 15 real estate developers.

Editor: Kim Taylor