(Yicai Global) Nov. 1 -- Shares in CIFI Holdings Group plummeted as much as 28.8 percent today after the Chinese private property developer said that it will pause repayment of its offshore debt's principal and interest.

CIFI’s share price [HKG:0884] was trading down 25 percent at HKD0.39 (USD0.05) as of 1.20 p.m. China time. Earlier in the day it sank to HKD0.37. In the last two months the stock has lost 86 percent of its value.

Sales and financing conditions have become worse since September and, as a result, there has been a worse-than-expected deterioration in the group’s cash flow, the Shanghai-based developer said in a filing to the Hong Kong stock exchange today. Rating downgrades triggered the early repayment of some of its debts, hiking repayment pressures significantly.

Pausing the repayment of offshore debt is an arrangement made to cope with extremely limited liquidity while meeting the goals of ensuring delivery of pre-sold apartments and maintaining normal operations, a company executive told Yicai Global.

CIFI, which has a USD300 million note due in January next year, has been relying on its own cash resources to pay off debt and so far this year has repaid about USD1.5 billion worth of principal and interest to offshore creditors. The firm had accumulated onshore and offshore debts of USD6.9 billion, as of today.

Last month, CIFI defaulted for the first time on its overseas debt, failing to pay back a HKD2.5 billion (USD318 million) offshore bond. At the time the company said it was in active communication with creditors. But it would now appear that CIFI has stopped discussions with its offshore creditors altogether.

This time round, CIFI tried to boost liquidity through asset disposal and other means, but "these options have proven to be difficult and time-consuming to implement in light of the adverse market conditions," it said.

"The Company wishes to reiterate its resolution to achieve a holistic solution to secure the long-term future of the Company for the benefit of all stakeholders and ensure fair and equitable treatment of all offshore creditors," it said.

CIFI is exploring the disposal of its overseas assets and is in preliminary discussions with potential buyers, but has not signed any deals yet, it added.

Editors: Liao Shumin, Kim Taylor