(Yicai Global) July 27 -- Shares in Powerlong Real Estate Holdings plunged by as much as 10.2 percent today after the Chinese real estate company said that it is unable to repay a matured note of USD21.3 million. It is the fourth major developer to default in the past week as the industry comes under great pressure as Covid-19 outbreaks hammer sales and financing remains tight.

Powerlong’s share price [HKG:1238] was trading down 9.4 percent at HKD1.06 (USD0.14) as of 12 noon China time today. Earlier in the day it sank to HKD1.05.

Powerlong is not able to pay the principal and interest on a debt of USD21.3 million that matured on July 25, the Shanghai-based firm said yesterday. And it is unlikely to be able to honor another bill of USD37.3 million due on Nov. 8.

The company is in active communication with bearers of the two notes in order to come to a mutually satisfactory arrangement for settlement, it added.

Powerlong is the fourth developer among the country’s top 100 to renege on its debt in the past seven days. "The string of defaults is unlikely to ease off any time soon, as July marks a peak period for debt repayment," Ding Zuyu, chief executive at real estate agency E-House, said earlier.

Hong Kong Junfa Property is unable to repay a debt of USD237 million in principal and USD13 million in interest that was due on June 24, it said yesterday. Issuer Power Best Global Investments gave it a month’s grace period which has now expired.

Jingrui Holdings is defaulting on a bond amounting to USD260 million in principal and USD15.6 million in interest that matured on July 25, the Shanghai-based company said on July 22.

And Xinyuan Real Estate has failed to repay a senior note worth CNY545.3 million (USD80.6 million), the Beijing-based firm said on July 19.

Powerlong, the biggest among the four developers, has been badly hit by recent outbreaks of Covid-19 in the Yangtze River Delta region, which encompasses Shanghai and the surrounding area, where most of its projects are based. Sales slumped 56.2 percent in the first half from the same period last year to CNY23.2 billion (USD3.4 billion). It is a big turnaround from last year when sales topped CNY100 billion (USD14.8 billion) for the first time, soaring 24 percent year on year to CNY101.2 billion.

Editors: Xu Wei, Kim Taylor