DOMESTIC real estate developer Agile Property Holdings Ltd. shelved plans Friday for a HK$2.75 billion (US$348 million) rights issue, sending its bonds tumbling in a sign of how property companies are struggling to raise cash amid a widespread housing downturn.

    The firm had planned to use the cash from the sale of new shares to finance existing debt as well as for working capital. Hong Kong-listed Agile said it would continue talks with banks on fundraising options.

    The scrapped share sale comes as China’s real estate sector is grappling with five months of falling prices and slumping sales amid a ballooning inventory of new homes and a sluggish economy.

    The firm also said its chairman has been detained by authorities but it has applied to the Hong Kong stock exchange to resume share trading today after a weeklong suspension.

    The firm said in a statement Friday evening that chairman Chen Zhuolin was required by Kunming city prosecutor “to stay at a designated residence” since the evening of Sept. 30.

    In Chen’s absence, non executive directors Fion Luk and Chan Cheuk-yin are to be acting co-chairpersons.

    Trading of Agile’s shares has been suspended since Oct. 3. The real estate company has remained silent on the reason for the trading halt, fuelling speculation about its ability to service its debts.

    On Friday, Agile’s bonds due in 2017 and 2019 were yielding 14-17 percent, up from 10-12 percent at the start of the week, according to data from Tradeweb. A week ago, the bonds were yielding 7-9 percent. (SD-Agencies)