(Yicai Global) June 16 -- Shares in Skyfame Realty plunged as much as 11.2 percent today after the private Chinese real estate developer said that it is unlikely to be able to pay off a Singapore-listed senior note worth USD263 million that matures next month as the firm comes under unprecedented liquidity pressure.

Skyfame’s share price [HKG:0059] was trading down 7.5 percent as of 12 noon China time at HKD0.074 (USD0.01). Earlier in the day it had slumped to HKD0.071.

Some USD247 million in principal and USD16 million in interest is due to be repaid on July 8, the company said yesterday. The firm is in negotiations with the bond holders to form a settlement plan. It is also in talks with creditors about repayment of another Singapore-listed note, also at a 13 percent interest rate, that comprises USD292 million of principal and USD18.9 million in interest and which matures on Dec. 16 next year.

Should negotiations fail and the company is unable to meet its obligations on time, this may trigger cross-defaults with other debts, said the Guangzhou-based firm, whose main projects are residential complexes in the Guangdong-Hong Kong-Macau Greater Bay Area.

Skyfame, which has already made payments of CNY2.8 billion (USD430 million) to creditors in the first five months, is the latest Chinese developer to find itself in a credit crunch amid a cooling real estate market, made worse by the recent Covid-19 outbreaks, and tighter restrictions on lending to the sector.

Sales slumped 63 percent in the first five months year on year, it said. The developer, which had 33 million square meters of projects under development as of the end of last year, has not managed to raise any new offshore financing this year and sees no signs of improvement in the refinancing environment, it said.

Last year, Skyfame logged losses of USD284 million, compared with profit of USD951 million the previous year. Revenue dipped 0.83 percent to USD7.6 billion. As of the end of 2021, the company only had cash in hand of USD1.3 billion and net assets of USD5.6 billion.

Editor: Kim Taylor