Chinese developer R&F Properties in discussions with two creditors over winding-up petition, says assets worth more than liabilities

Developer to seek legal measures to ‘resolutely oppose the alleged application’, is confident that the matter will be resolved, R&F says in filing

R&F had about 302 billion yuan (US$42.16 billion) in liabilities versus assets worth about 369 billion yuan, according to annual report filed in April

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The developer has not yet received any court documents about the winding-up petition and will keep its shareholders and investors informed of any significant developments, it says. Photo: Sohu

Published: 1:25pm, 14 Jul 2023Updated: 1:28pm, 14 Jul 2023

Guangzhou R&F Properties, one of China’s most indebted developers, said in a filing with the Hong Kong stock exchange on Thursday that it was in discussions with two creditors that have sought to wind up the developer over debts worth about 20 million yuan (US$2.8 million).

R&F has yet to reach a settlement with Guangdong Xiangzheng Trade and Commerce and Guangzhou Guangfeng Concrete, which have filed an application in a Guangzhou court. It said in its filing that it has more assets than liabilities and denied being insolvent.

“The company will seek legal measures to resolutely oppose the alleged application, and take all necessary actions to protect its legal rights,” R&F said in the filing. “Meanwhile, the company is actively discussing with the applicants and is confident that the matter will be resolved.”

The developer had not yet received any court documents about the winding-up petition, and would “keep its shareholders and investors informed of any significant development” and “make further announcements as and when appropriate”.

R&F is among mainland Chinese developers that have had to contend with a credit squeeze following the introduction of Beijing’s “three red lines” policy, which was issued in 2020 to rein in risky borrowings and unfettered expansion. With credit lines restricted, many developers have been unable to meet their debt obligations, resulting in defaults.

R&F had about 302 billion yuan in liabilities versus assets worth about 369 billion yuan, according to its annual report filed in April.