By Clarence Leong

Shares of Sichuan Languang Development Co. are hovering near a decade low after the company defaulted on a bond and announced overdue debt of more than $700 million, the latest sign of trouble in China's heavily indebted property-development sector.

The Sichuan-based company failed to repay 967.5 million yuan ($149.4 million) in principal and interest due on a 2019 medium-term bond that matured over the weekend, it said in a filing to the Shanghai stock exchange Tuesday. Including bank and trust loans, the company has overdue debt of CNY4.54 billion, it said.

Languang Development said it has faced refinancing difficulties in the public market since late 2020, as the recovery in operating cash flow slowed and some financial institutions brought forward debt-maturity dates.

S&P Global Ratings on Tuesday downgraded the company's long-term issuer credit rating, saying it expects the bond nonpayment to lead to a general default, as it triggers cross defaults and accelerated repayment demands on other debt.

Languang Development's Shanghai-listed shares briefly dipped in morning trade to CNY2.70. Shares last closed lower than that level in 2010. The stock was recently 0.4% lower at CNY2.74, losing 41% so far this year.

A tight credit environment and slowing contracted-sales growth have weighed on the property sector in China. Developers including Sunshine 100 China Holdings Ltd., Oceanwide Holdings Co. and China Fortune Land Development Co. have defaulted on debts this year.

Languang Development said that it is discussing solutions and seeking to raise funds, adding that it has substantial support from the local government to devise medium- to long-term plans.

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

(END) Dow Jones Newswires

07-13-21 0150ET