Tianjin state-owned developer’s asset frozen after missed debt payment, raising concerns on maturity wall

Tianjin Real Estate Group, a cash-strapped Chinese state-owned developer, has missed another debt payment schedule in its struggle to stay afloat, causing creditors to freeze one of its prime assets and stoking concerns about its maturing debt pile this year.

The group’s 13.53 per cent stake in Shanghai-listed builder Tianjin Realty Development has been frozen for three years under a court order from February 24, builder said in an exchange filing on Tuesday. Ping An Trust filed for the freezing order from the Shenzhen Intermediate People’s Court after the developer failed to repay 1.7 billion yuan (US$244.5 million) of borrowings, the filing shows.

The non-payment reflects the state-backed developer’s long-running efforts to extricate itself from a debt load accumulated through years of credit-fuelled investment and expansion. The latest stumble puts the spotlight on its ability to service its maturing debt at a time when China’s economic slowdown is being compounded by the coronavirus outbreak.

Tianjin Real Estate Group has about US$777 million of debt maturing this year and US$2.1 billion in 2021, according to data from Refinitiv. The group had 20.61 billion yuan in total debt and 14.5 billion yuan of cash and other liquid assets as of June 2018, according to Bloomberg data.

Tianjin’s economy has lost some momentum in recent years, with growth easing to 3.6 per cent in 2017 from 9 per cent a year earlier. Last year’s expansion of 4.8 per cent was below the nation’s 6.1 per cent pace, as efforts to spur activity in the Beijing-Tianjin-Hebei regional alliance came up against headwinds such as the US-China trade war.