China developers get approval for private placements
SHANGHAI, March 20
SHANGHAI, March 20 (Reuters) - Two Chinese property developers said they have received regulatory approvals to make private placements of shares, paving the way for more real estate firms to raise funds after a near four-year ban by authorities on real estate companies from seeking new financing.
Chinese developers Tianjin Tianbao Infrastructure Co. and Join.In Holding Co., received regulatory approval to sell yuan-denominated A shares in private placements, according to separate statements to Shanghai and Shenzhen stock exchanges.
The latest approvals, which come amid growing fears of defaults in the property sector after the collapse of Zhejiang Xingrun Real Estate, will pave the way for more developers to raise capital and alleviate crash crunches.
China stopped allowing developers to raise money by selling shares in April 2010 on concerns that surging home prices were inflating an asset bubble.
The Shanghai Securities News reported on Thursday more than 30 listed property firms have submitted proposals to raise a total of 90 billion yuan since the second half of last year.
Government officials told Reuters on Tuesday that Zhejiang Xingrun Real Estate Co, based in the coastal city of Ningbo in Zhejiang province, is on the brink of bankruptcy. State media have estimated the company owes 15 domestic banks 2.4 billion yuan ($387.32 million) and individual investors another 1.1 billion, with only 3 billion yuan of assets on hand.
News of the expected bankruptcy came amid growing concerns about debt in China following the country's first domestic bond default earlier this month.
Data released on Tuesday showed that Chinese home inflation slowed for a second straight month in February, due to government policy curbs and declining domestic demand. Some markets saw outright price declines, in particular the Zhejiang cities of Wenzhou and Ningbo, where Zhejiang Xingrun is based. ($1 = 6.1965 Chinese Yuan) (Reporting by Fayen Wong; Editing by Eric Meijer)