A source close to the company, the nation's third-largest property developer by sales, said Sunac is considering a restructuring of its offshore debt to extend payments. It is also talking to state-owned entities about strategic investments in the firm.
Sunac declined to comment.
The company said in a filing to the Hong Kong stock exchange that it has hired Houlihan Lokey as a financial advisor and Sidley Austin as a legal adviser to explore solutions to ease current liquidity constraints.
With $7.7 billion in dollar bonds, Sunac is the fourth-largest issuer among Chinese developers.
China's property sector has been hit by a series of defaults on offshore debt obligations, highlighted by China Evergrande Group and Kaisa Group, as well as bond exchanges, with Zhongliang Holdings the latest firm to extend payments.
Adding to pressure on the sector are COVID-related lockdowns across the country that are weighing on sales, while a weakening yuan has made it more expensive for developers to meet payments on their offshore debt maturities, worth around $20 billion for the rest of the year.
More major developers could miss their upcoming obligations or may need to do bond exchanges, analysts and developers said.
Online financial news site Cailianshe reported on Thursday that Shenzhen-based Logan Group is in talks to extend the maturities of its offshore debt. The firm's Hong Kong-listed shares were suspended from trading pending inside information.
Logan did not immediately respond to a request for comment.
In its Thursday filing, Sunac said: "The group's contracted sales have continued to decline significantly, while access to new financing has become increasingly difficult with more liquidity issues occurring among certain property developers."
In a separate statement, Sunac said its aggregated sales in March and April fell 65% from a year ago due to COVID-19 outbreaks in various cities, and its refinancing and asset disposal plans did not materialise after a series of rating downgrades earlier this year.
The firm confirmed it missed the Wednesday deadline for a $29.5 million interest payment on the October 2023 bond that was required to be repaid last month, and it does not expect it will pay three other coupons due last month totalling $75.3 million before the 30-day grace periods expire, or pay other senior notes when they become due.
Sunac said missing the October 2023 payment meant bondholders could seek the immediate repayment of the principal and interest but it had not received any "acceleration notices" from those holders.
It apologised to its creditors in the filing and asked them to give it the time "to overcome challenges" while it makes efforts to enhance its credit profile, including accelerating sales, disposing of assets, seeking debt extension, and introducing strategic investors.
Lucror Analytics moved Sunac to "Default" from "Very High Risk" after the missed payment, credit analyst Shu Hui Woon said in a note, adding that Sunac will need to successfully dispose of more assets to temporarily improve liquidity.
The October 2023 bond was traded at 21.004 cents on the dollar as of 0802 GMT, edging up from 19.107 on Wednesday, while another bond due June 2022 traded at 27.230, according to data from Duration Finance.
Sunac's Hong Kong-listed shares have been suspended since April 1 pending the release of its 2021 financial statements. Its unit Sunac Services fell more than 11% on Thursday.
The Hang Seng Mainland Properties Index dropped 3.4%.
(Editing by Christian Schmollinger and Edmund Klamann)
By Scott Murdoch and Clare Jim