(Yicai Global) July 13 -- Languang Development aims to come up with a plan of how to scale down its debt after the Chinese property developer’s defaults reached CNY4.5 billion (USD695 million).

Languang is in talks with local government and financial regulators to draw up a plan with short, mid and long-term goals, the Chengdu-based company said in a statement yesterday. At the same time, to defuse the debt risks, it will try to work with all parties to actively raise funds and resolve the issue.

The builder’s overdue principle and interest payments almost doubled as of June 12 after it defaulted on CNY2.5 billion of debt earlier this year, it said. Languang has 14 bonds outstanding worth a combined CNY10.5 billion (USD1.6 billion), of which CNY2.9 billion is set to mature in one year, according to Wind data.

The company has suffered a cash crunch since the end of last year as it failed to refinance in the open market, and faced a slower return of operational cash flow against the backdrop of changed economic, industrial and financial conditions, it said.

Changjiang Securities Asset Management and AVIC Trust applied to freeze the shares of Languang’s controlling shareholders, it said on July 9. Blu-ray Investment Holding holds 56.72 percent of the total share capital, 17.45 percent of which has already been frozen.

Shares of Languang Development [SHA:600466] closed unchanged today at CNY2.75 (43 US cents), after earlier falling as much as 1.8 percent to CNY2.70, the lowest since its back-door listing in 2015.

Editor: Futura Costaglione