(Reuters) – Shanghai-based Zhenro Properties Group Ltd on Tuesday warned of a huge loss for fiscal 2022, hurt by a steep decline in demand for new homes amid a crisis in the country’s real estate sector.
Cash-strapped Zhenro is expected to post an attributable loss of between 12.5 billion yuan ($1.82 billion) and 13.5 billion yuan for the year ended Dec. 31, compared with a profit of 809 million yuan recorded a year earlier.
Zhenro is one of several Chinese developers that has missed offshore bond payments and struggled to repay debt in the past year amid slowing sales, with some now scrambling to enter into restructuring agreements with their creditors.
As indicated earlier, the company plans to provide a preliminary proposal on its liability management solutions programme to offshore creditors by March end, it said in a statement.
“The offshore Holistic Liability Management Solutions, if accepted by creditors and implemented, will provide creditors with a higher recovery value than the estimated recovery upon liquidation,” it said.
Financial results from several property developers in recent days, including Kaisa Group, have revealed big losses.
($1 = 6.8785 Chinese yuan renminbi)
(Reporting by Archishma Iyer in Bengaluru; Editing by Krishna Chandra Eluri and Anil D’Silva)