Chinese property developer CIFI shares fall further despite payment issues

A man and a child walk by a construction site under the property developer CIFI Holdings in Wuhan.

HONG KONG Reuters - Shares of CIFI Holdings fell further on Thursday, even though the Chinese property developer clarified that it was trying to solve payment difficulties related to a trust product and had repaid interest on time on an offshore bond.

The Hong Kong-listed shares of CIFI were down 25.6% at HK $0.64 after hitting a record low of HK $0.63 earlier in the session. The stock fell 32.3% on Wednesday after reports said the company missed payments on certain non-standard debt.

Cash distribution was hampered by a trust product used to raise funds for a project in Tianjin city because sales were not good, according to a filing to the Hong Kong stock exchange late on Wednesday.

The company didn't elaborate on the product's value and how much cash distribution was in difficulty.

The CIFI said it would continue to take all practical measures to improve its cash flow position, although the domestic real estate industry is facing serious difficulties and challenges and the COVID- 19 epidemic situation remains volatile. The company said it would make interest payment on Wednesday for its offshore 6.55% senior notes due to 2024, and that it will continue to take all practical steps to improve its cash flow position.

After filing, CIFI's dollar bonds strengthened marginally across the curve, but its onshore bonds fell broadly on Thursday.

A broader index tracking mainland developers listed in Hong Kong fell 2.5%, adding to its 6.4% fall on Wednesday and hitting a new record low.

CIFI also clarified in the filing that the 30 billion yuan $4.14 billion cash cited by Chairman Lin Zhong in an internal letter dated Sept. 27 was not audited.