Communist Chinese Real Estate Industry Continues to Collapse – Ronshine Defaults On Interest

On July 10th, Ronshine China Holdings Ltd. announced that it could not pay its debt interest totaling US$27.9 million after the grace period expired. This is yet another Communist Chinese real estate developer whose debt is on the verge of total collapse. In a filing to the Hong Kong Stock Exchange on Sunday, Ronshine said that it has not yet paid US$12.798 million in interest on its 8.1% senior debt due in June 2023. The debt is due and payable on June 9th, but has a 30-day grace period for its interest payment.

The company also said it has not paid $15.07 million in interest on its 7.35% senior debt due in December 2023. The debt is due and payable on June 15, but has a 30-day grace period to pay its interest.

Ronshine’s Chairman Ou Zonghong said, “In view of the current liquidity situation, Ronshine cannot guarantee that it will be able to perform its interest repayment obligations on the above-mentioned senior debt and other senior debt when they expire or are within their grace period.”

In response to the above-mentioned inability to perform its obligations, Ronshine hopes that creditors would give a certain buffer time to resolve its funding problems. Given the current financial predicament, the company intends to hire consultants to discuss feasible solutions with overseas creditors to seek a reasonable resolution. Starting with the Evergrande group, a series of offshore debt defaults broke out in the Communist Chinese real estate industry. Evergrande, the industry leader, was once the best-selling developer in Communist China. Ironically, it is now the world’s most indebted real estate developer.