(Yicai Global) Sept. 30 -- Tahoe Group has not fulfilled all the terms of its equity transfer contract with China Vanke, but Vanke has no current intention of unilaterally terminating their agreement, financially distressed Chinese real estate firm Tahoe said in a statement yesterday before the lapse of the agreed time limit for its compliance.

To ease Tahoe's funding squeeze, on July 30 the pair signed the share sale agreement, per which Tahoe was to transfer 19.9 percent of its stock to Vanke's Hainan Wanyi Management Services unit for CNY2.4 billion (USD355.3 million) in cash.

Tahoe's stock price [SHE:000732] had jumped 4 percent to CNY4.32 (63 US cents) by late afternoon on the announcement.

The agreement set as a prerequisite for the share transfer that Tahoe, which is based in Fuzhou in southeastern Fujian province, had to strike an agreement with its creditors and devise a debt restructuring plan able to restore the company’s normal and sustainable operations, and whose effects had to be evident to both Tahoe and Vanke.

Shenzhen-based Vanke had the right to kill the deal if the conditions were not met before today, under the agreement.

Untoward Incidents Unwanted

Tahoe and its creditors are still negotiating the debt restructuring plan, and some still need time to complete their internal approvals, the statement explained.

Vanke deprecates inimical occurrences in the property sector that may also reflect badly on it, and so does its utmost to help realty companies mired in difficulties, per the premise of safeguarding its own interests, its Chairman Yu Liang told media on Aug. 14.

Tahoe and its units are embroiled in 148 lawsuits with CNY1.4 billion at stake, but it listed no estimated liabilities flowing from these in the semi-annual report the firm published on Aug. 14. Other small lawsuits and arbitrations Tahoe did not include in its report that had grown to 260 as of Aug. 15 entailed some CNY1.6 billion in claims.

Tahoe has failed to make timely payment of principal and interest on four bonds since the start of the year. It had CNY892 million (USD130.9 million) in bank deposits frozen in lawsuits as of the end of June in a 273.63 percent rise from the beginning of the period. It had CNY34.9 billion (USD5 billion) in defaulted loans and CNY4.3 billion in unpaid interest on Aug. 15.

Tahoe is still in talks with all creditors and has not yet formed a comprehensive debt restructuring plan. It has to date only concluded an equity transfer framework agreement with Vanke to introduce strategic investors.

Editor: Ben Armour