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Report: Debt-laden Tahoe Group plans sale of 40B yuan of projects in China

Tahoe Group Co. Ltd. is planning to sell 12 developments across China that it acquired for at least 40 billion yuan over the past two years in an effort to raise funds amid an impending risk of defaulting on its debt, the South China Morning Post reported, citing sources familiar with the matter.

The property company based in Fujian, China, is believed to be putting on the block projects under construction in the cities of Guangzhou, Hangzhou, Shenzhen, Nanchang, Kunshan and Zhongshan. According to the publication, the developments are primarily residential with some featuring commercial components.

An unnamed senior executive of an undisclosed private equity real estate fund told the publication that she was hesitant when approached to help sell the projects because she believed the assets would be difficult to market. Tahoe Group, on the other hand, declined to comment on the divestment but assured it will provide information on the stock exchange regarding any major sales, the March 21 report added.

A Bloomberg News survey of analysts and portfolio managers in January put Tahoe Group's one-year default risk at 6.75%, according to SCMP. With the figure, the company topped the list and surpassed the default risk of 46 other developers with a market value surpassing US$2 billion.

As of March 21, US$1 was equivalent to 6.70 yuan.