A major subsidiary of Fantasia Holdings Group was facing a wind-up petition filed by its creditors, which could force the debt-laden Chinese developer into insolvency, South China Morning Post reported on Nov. 26.

The petition was related to a $149 million loan of which Fantasia Investment Holdings was a guarantor, said the Shenzhen-based developer in a stock exchange filing on Thursday evening, without revealing the names of the creditors that filed the petition.

It is the first time that a wind-up petition concerning offshore debts has been filed against a mainland developer or its subsidiaries, SCMP added.

A wind-up petition aims to convince the courts to force a debtor to liquidate its assets to repay loans and is often the last resort after other pathways have been exhausted.

“The case will fuel concerns about the developer’s fate,” said Wang Feng, chairman of Shanghai-based financial services company Ye Lang Capital.

“More importantly, it is a fresh sign that international investors are increasingly worried about mainland developers’ asset quality and business prospects.”

Shares of Fantasia fell 4.4 cents in morning trading on Friday to 32.5 HK cents (5 U.S. cents).

Fantasia is one of at least six debt-ridden Chinese developers who have defaulted or asked investors to wait longer for repayment.

Last month, it failed to repay a $205.7 million bond due on Oct. 4, and the company said there was no guarantee that it would be able to meet its other financial obligations.

The company is also confronting a sharp fall in sales.

Last week, it said sales of housing contracts for October were down 62% from a year ago at $330.4 billion.

For the first half of 2021, the company reported a profit of $4.47 million, up 9.5% on the year.

As of June 30, it had current liabilities—those that have to be repaid within a year—of nearly $7.8 billion, including $1.3 billion in borrowings and almost $1.7 billion in senior notes and bonds.

Fantasia, a builder of classy residential projects and deluxe apartments in mainland cities like Beijing and Wuhan, was founded in 1996 by Zeng Jie, the niece of former China’s vice-president Zeng Qinghong.

According to Bloomberg, the head of Fantasia Holdings is Zeng Baobao, the granddaughter of Zeng Qinghong. Zeng Shan, the grandfather of Zeng Baobao and the father of Zeng Qinghong, served as Minister of Internal Affairs under Mao Zedong.

According to Vision Times, the fall of Fantasia is likely related to Zeng Baobao of Jiang Zemin’s faction being under attack by CCP leaders.

Vision Times reported that the CCP wiped out the Zeng Qinghong family because they flaunted their wealth and involvement in many financial scandals.

Regarding princeling companies like Fantasia, Lin Heli, a professor at the University of Hong Kong, believes they once enjoyed political protection; now they have no choice. If they do not obey Xi Jinping’s orders, their future will collapse.

The debt crisis obsessing Chinese developers was sparked in early October by China Evergrande Group, the world’s most indebted home builder with liabilities of $300 billion struggling to avert defaults on much of its offshore debt.

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