UPDATE 1-China's Peking Founder seeks bond repayment delay to Feb 2020-sources

(Adds proposal not yet agreed upon, Peking Founder’s ownership of Bank of Chongqing’s shares)

BEIJING/SHANGHAI, Dec 20 (Reuters) - China’s Peking University Founder Group asked investors on Friday to extend the grace period to repay an overdue onshore China bond to Feb. 21, 2020, according to two sources familiar with the matter.

The company missed a payment deadline for 2 billion yuan ($285 million) worth of maturing short-term commercial paper on Dec. 1 and had until next Monday to make up the shortfall.

The state-owned company affiliated with a top Chinese university proposed using Hong Kong-listed shares of Bank of Chongqing as collateral at a meeting with bondholders in Beijing on Friday, the sources said.

The proposal has not yet been agreed upon, according to the sources.

Up to $2.95 billion of Peking Founder’s offshore U.S. dollar debt could cross-default upon the onshore paper’s failure, Japanese brokerage Nomura has warned.

Peking Founder holds about 3% of Bank of Chongqing’s shares, according to the lender’s third quarter report.

Reuters was not immediately able to reach Peking University Founder Group for comments. ($1 = 7.0085 yuan) (Reporting by Xiaochong Zhang in Beijing and Andrew Galbraith in Shanghai; Writing by Noah Sin in Hong Kong; Editing by Tom Hogue and Muralikumar Anantharaman)