- Chinese developer Modern Land is asking for more time to repay a $250 million bond due later this month.
- Its chairman and president said they would personally contribute $123.9 million to the repayment.
- It’s the latest in what’s becoming a series of debt woes spread across China’s real estate sector.
Chinese real estate developer Modern Land has asked for three more months to repay a $250 million bond that’s due on October 25, according to a Monday exchange filing. The proposal signals further credit woes for China’s property market as Evergrande’s $300 billion debt crisis unfolds.
Beijing-based Modern Land, which says it owns 200 apartment and office properties across 50 cities in China, asked bondholders to extend its deadline to January 25, 2022, so it could use the time to improve its
and cash flow management to “avoid any potential payment default under the [bond].”
On the same day, Modern Land President Zhang Peng announced that he and company Chairman Zhang Lei plan to contribute $123.97 million toward paying off shareholder loans within the next two or three months.
“Mr. Zhang Lei expressed that he would consider giving continuous support in due course depending on the Group’s financial situation,” wrote Zhang Peng. “It demonstrates his continuous commitment to the Group and his unwavering confidence in the Group’s businesses and development.”
Zhang Lei, the company’s founder, owns a 65.3% controlling interest stake in Modern Land, which has around 2,240 employees, according to its 2021 interim report. The company is positioning itself as an environmentally-friendly developer, in line with Xi’s carbon neutrality commitment, per its reports and company profile.
Stock in the company is down 45% year over year, according to CNN.
Modern Land is the latest in what’s becoming a series of debt difficulties spread across China’s property market. Last week, another Chinese developer, Fantasia Holdings, defaulted on $206 million in loan payments due last Monday, though its chairman said several weeks before that it had “no liquidity issues.”
Meanwhile, property giant Evergrande Group, China’s second-largest developer, is verging on collapse under the weight of its $300 billion credit crunch. Its multiple defaults in the past months have sent shockwaves across the Chinese real estate sector, upsetting unpaid suppliers, employees, and retail investors.
Modern Land did not immediately respond to Insider’s request for comment.