Debt-laden developer China Evergrande Group has failed to pay some overdue bills, piping supplier Yonggao said, in the latest sign of a cash crunch at the teetering home builder.
Financial markets are worried that the size of Evergrande’s debts present a systemic risk were it to fail and the firm’s executives last week were issued a rare warning from regulators to get their house in order.
Yonggao now joins a handful of suppliers to threaten or launch legal action over missed or late payments.
In an exchange filing, the Shenzhen-listed pipe-producer said it was owed 478 million yuan (US$74 million) in commercial bills, of which 195 million yuan was overdue. It said it could sue the developer, adding that since May it had stopped deliveries.
Evergrande had no immediate response. It had pledged on Friday to do everything it can to resolve its debt issues, but markets appear to remain unconvinced and nervous.
Evergrande shares rose 1.5 per cent in Tuesday morning trading but sit just a fraction above a five-year low touched on Monday.
The developer has more than 240 billion yuan of bills and trade payables from contractors to settle over the next 12 months, according to ratings agency S&P Global.
Construction work has been halted on two of its projects in the southwestern Chinese city of Kunming, one of them for overdue payments worth more than 210 million yuan, state media China National Radio said earlier this month.