China developer fails to deliver projects due to financial pressure

HONG KONG (Reuters) - A Chinese developer on Thursday said it had failed to deliver some properties to homebuyers on time because of financial pressure but denied media reports that it was on the brink of collapse.

The news underlines the growing pressure on China's real estate industry as banks have made it harder for developers to get loans and authorities have tightened controls on speculative buying.

Shenzhen-based Guang Real Estate Group Co said the delivery of "a small amount" of homes and apartments in the southern city of Huizhou had been delayed, but it had compensated the buyers and promised to complete these projects eventually.

"We are facing some capital pressure, but the banks in partnership still care about us and we are confident in pulling through this hard time," a company official told Reuters.

The company said it would borrow from banks, funds and trusts, as well as speed up new projects for sale in order to ease the liquidity crunch.

Guang Real Estate denied reports that it was near collapse due to financial troubles. "Some media said we're on the brink of collapse, which is not true," the company said.

The Guang Group was founded in 2002 and employed 2,300 people as of the end of 2012, according to its website.

In March, government officials told Reuters that Zhejiang Xingrun Real Estate Co, based in the coastal city of Ningbo in Zhejiang province, was on the brink of bankruptcy.

State media have estimated the company owes 15 domestic banks 2.4 billion yuan (S$480.6 million) and individual investors another 1.1 billion yuan, with only 3 billion yuan of assets on hand.