Biguiyuan, China's largest real estate company, may default on debt due to financial difficulties

Recently NHK New on-line reported the following:

中国 不動産最大手の「碧桂園」 経営難で債務不履行の可能性

2023年10月19日 9時48分

経営難に陥っている中国の不動産最大手の「碧桂園」をめぐり、海外メディアは一部の外貨建ての債券の利払いについて、最終的な期限を迎えたものの、履行が確認できていないと伝えました。デフォルト＝債務不履行に陥ったとみなされる可能性があります。

中国の不動産最大手「碧桂園」は、国内の不動産市場の低迷による販売不振などで経営難に陥っていて、今月10日には、すべての外貨建ての債務について期限までに支払えない可能性があるという見通しを示しました。

こうした中、ロイター通信は関係者の話として一部の外貨建ての債券の利払いについて、18日、最終的な期限を迎えたものの履行が確認できていないと伝えました。

実際に支払いが行われていなければ、格付け機関などからデフォルトに陥ったとみなされる可能性があります。

中国では、不動産市場の低迷が長引いていることを背景に関連する企業の業績や資金繰りの悪化が深刻になっていて、業界最大手がデフォルトに陥ったとみなされた場合には中国経済の先行きへの懸念が一段と強まることになりそうです。

Translation

About Biguiyuan(碧桂園), China's largest real estate company that was in financial trouble, foreign media reported that the final deadline for interest payments on some foreign currency-denominated bonds had been reached, yet their payment was not confirmed.  Default, i.e., unable to fulfill the obligation to pay debt, was being considered as a possibility.

Biguiyuan, China's largest real estate company that was facing financial difficulties because of sluggish sales due to the slump in the domestic real estate market, as of the 10th of this month was giving out the outlook that it might not be able to pay all foreign currency-denominated debts by the deadline.

Under these circumstances, Reuters citing sources to report that, while the final deadline for interest payments on some foreign currency-denominated bonds had reached on the 18th yet payment fulfillment was not confirmed.

If the payment was not actually made, it could be considered in default by rating agencies etc.

In China, due to the prolonged slump in the real estate market, related companies were facing serious deterioration in their business performance and cash flow, and if the largest companies in the industry were deemed to have defaulted, concerns about the future of the Chinese economy were likely to grow even more.

              So, Biguiyuan is facing financial difficulties arising from sluggish sales due to the slump in domestic real estate market. It is another sign that China’s economy is in trouble.