Chinese developer CIFI dumps assets to inject funds as liquidity evaporates in property downturn
- CIFI makes loss-making asset sales this week to ‘enhance the group’s liquidity to ensure the delivery of properties and continuation of its business operations’
- The company says enhancing liquidity is a crucial strategy for market peers to survive and sustain under the crisis
Heavily-indebted Chinese property developer CIFI Holding Group extended its asset selling campaign with another loss-making deal, as it grapples with a liquidity crunch and seeks to “survive and sustain under the crisis”.
In its latest disposal, the company raised 436 million yuan (US$61 million) by selling the 49 per cent stake it owned through a subsidiary, Beijing Xuhui Shunxin Real Estate, in Tianjin Chuangda Real Estate Development. The buyer, Shijiazhuang Ronglang Enterprise Management Services, holds the remaining 51 per cent equity interest.
The loss of 28 million yuan, from the disposal, “is not expected to have immediate material impact on the financial position of the group”, the company said.
This brings the total funds raised from asset disposals and announced this week to 657 million yuan, following the deal unveiled on Monday.
“The property market in the PRC has been facing unprecedented challenges and the property developers are encountering liquidity pressure,” Cifi’s notice to the stock exchange said. “Enhancing liquidity are the crucial strategies for market peers to survive and sustain under the crisis.”