China’s Powerlong Real Estate warns of debt default risk

POWERLONG Real Estate said on Wednesday (Nov 29) its cash on hand and bank deposits would not be enough to cover existing and future debt, making it the latest Chinese property developer that could default.

In an exchange filing, Powerlong also said it has not made an interest payment of US$15.9 million under 5.95 per cent senior notes due April 2025 issued by the company. These notes are listed on the Singapore Exchange.

China’s property sector has been squeezed by a regulatory crackdown since 2020 as authorities curbed excessive debt, which tightened liquidity and raised default risks for developers.

Powerlong Real Estate’s interest became due and payable on Oct 30 and the company had a grace period of 30 days to make the payment.

The non-payment of the interest will result in an event of default under the terms of certain offshore long-term interest-bearing banks and other borrowings of the company, it said.

Separately, Powerlong said it was working towards ensuring timely delivery of its property development projects to secure cash resources for sustainable development. REUTERS