Chinese Developer Drowns in Debt

Real estate developer collapses under equivalent of US$566.6 million in debt, less than two weeks after China's first corporate bond default.

A closely held Chinese real estate developer with 3.5 billion yuan (US$566.6 million) of debt has collapsed and its largest shareholder was detained, said government officials familiar with the matter.

Zhejiang Xingrun Real Estate Co. doesn’t have enough cash to repay creditors that include more than 15 banks, with China Construction Bank Corp. (CCB) holding more than 1 billion yuan of its debt, according to the officials, who asked not to be named because they weren’t authorized to discuss the matter. The company’s majority shareholder and his son, its legal representative, have been detained and face charges of illegal fundraising, the officials said.

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