(Yicai Global) May 12 -- Sunac China Holdings is unable to pay the interest of USD104 million due on four US dollar-denominated bonds because of plunging sales, the cash-strapped Chinese real estate giant said today.

Interest payments were due last month and the 30-day grace period for one note expired yesterday, the Beijing-based developer said. The bonds were issued on the Singapore Stock Exchange and will mature between April next year and October 2024.

The firm is seeking solutions with the bond holders, but creditors are likely to demand accelerated payment or the seizing of assets if no consensus is reached, it added.

The recent Covid-19 outbreaks in many of the country's economic hubs, including Shanghai, Guangzhou and Chengdu, have dealt a cruel blow to the already cooling real estate sector. Sunac’s sales plummeted 75.2 percent last month from a year ago to CNY13.6 billion (USD2 billion), while the contracted area sold sank 72.5 percent to 1.1 million square meters. Sales in the first four months halved from a year ago to CNY85.9 billion (USD12.6 billion).

Teetering on the brink, the developer has managed to raise almost CNY40 billion (USD5.9 billion) through speeding up the collection of payments, selling assets, equity financing and taking out interest-free loans from its parent firm, however it seems it is too little too late.

Sunac was the country’s fourth biggest real estate enterprise in 2020. But as the government started clamping down on the property sector’s high level of indebtedness, the firm was among those that came under the spotlight. Sunac had racked up liabilities of CNY997.1 billion (USD148.8 billion) with assets of CNY1.2 trillion (USD179 billion) as of the end of June last year, giving it an asset-debt ratio of 82.72.

Sunac’s stock was suspended from trading in Hong Kong at the end of March after the firm failed to submit its 2021 financial results in time.

Editors: Tang Shihua, Kim Taylor