On March 21, the mainland company “Diou Shuihua” Group Co., Ltd. announced that it had accepted real estate companies such as Vanke, Country Garden, and Longfor Group using properties to repay a debt of 155 million yuan owed by these real estate companies to Diou Shuihua.
In a statement titled “Announcement on the Company Accepting Non-Cash Assets for Debt Repayment,” Diou Shuihua agreed to accept non-cash assets for debt repayment: “The debtor will use the total amount of completed and under-construction commercial properties (including residential, retail, apartments, parking lots) amounting to 160,956,243.60 yuan (including value-added tax) to offset the total owed payment of 154,891,296.35 yuan to the company, with the remaining 6,064,947.25 yuan to be paid by the company in cash.”
This method of debt repayment using properties is known as “non-cash assets for debt repayment.”
The announcement specified that the real estate companies participating in this debt-for-property arrangement include Vanke, Country Garden, Longfor Group, China Fortune Land Development, Evergrande Group, China Overseas Land & Investment, and XINHUANET, among others, totaling 19 real estate enterprises.
In another announcement released on the same day, Diou Shuihua stated that its Board of Directors’ Strategic Committee had approved the “Announcement on the Company Accepting Non-Cash Assets for Debt Repayment.”
Regarding Diou Shuihua’s acceptance of real estate companies using properties for debt repayment, some observers believe that the crisis in the real estate industry has spread downstream to other businesses. A netizen with the username “追求快樂zcm” commented, “Longfor, Vanke, they all have to resort to property to settle debts? It seems that the pressure of repayment has been transmitted downstream to suppliers, making it difficult for the industry as a whole.”
Another netizen, “一篇,” remarked, “Real estate companies collectively using properties for debt repayment indicate that Diou’s capital chain seems tight.”
Public information indicates that Diou Shuihua Group Co., Ltd. is located in Chengdu, Sichuan Province, and its business scope includes manufacturing sanitary ceramic products, manufacturing sanitary ware, selling sanitary ceramic products, researching and developing sanitary ware, and selling kitchen and bathroom products.