By Clarence Leong


Shares of CIFI Holdings (Group) Co. fell sharply in early Tuesday trade, after the Chinese property developer suspended payments on offshore debt and said its cash flow has worsened more than expected.

CIFI Holdings opened 26% lower in Hong Kong and the stock was last down 25% at 0.39 Hong Kong dollars (US$0.05). It has slumped 91% this year.

The Shanghai-based home builder said in a Tuesday filing that it has failed to reach an agreement with all offshore creditors on payments due in October, and it has subsequently "terminated all relevant discussions with individual creditors and creditor groups offshore."

To ensure "fair and equitable treatment of all offshore creditors," CIFI has suspended payment on its offshore financing arrangements, it said in the filing.

CIFI, a private developer, said its cash flow has deteriorated since early September amid sluggish property sales and tightening credit in the Chinese real-estate industry.

The company will strive to ensure delivery of homes, continue normal operations and maintain onshore financing arrangements, it said. CIFI will keep exploring opportunities for offshore asset disposal and has held preliminary talks with potential buyers, though no legally binding agreement has been struck, it said.

"Notwithstanding the Group's resolution and efforts, the Group is likely to come under continued pressure to generate sufficient cash flows to meet its existing and future obligations," it said.


Write to Clarence Leong at clarence.leong@wsj.com


(END) Dow Jones Newswires

10-31-22 2237ET