Chinese property developer Country Garden has warned that it cannot repay a 470 million Hong Kong dollar (£49 million) loan on time.

The firm’s admission is the latest sign of distress in the industry after Beijing clamped down on mounting debts.

In a filing to the Hong Kong Stock Exchange, the company said that it “expects that it will not be able to meet all of its offshore payment obligations when due or within the relevant grace periods,” including US dollar notes the firm has issued.

Country Garden earlier had been hailed as a model real estate company by Chinese authorities.

It had avoided defaults on debt even as rivals such as China Evergrande, the world’s most heavily indebted property firm, defaulted in 2021 after the Chinese government began restricting borrowing by developers.

The company’s Hong Kong-traded shares sank 10.7% on Tuesday.

Its liquidity crisis suggests developers remain under pressure even after regulators lifted some controls on housing purchases to alleviate troubles in the industry.

The company also has recently received loans from banks, such as a 50 million US dollar (£41 million) loan from China Minsheng Banking Corporation earlier this year on top of a separate 280 million US dollar (£230 million) loan from the Hong Kong unit of the Industrial & Commercial Bank of China in December 2022.

Country Garden said its sales faced “remarkable” pressure after the property sector went under “profound adjustments”.

Its sales slumped nearly 44% in January to September from the same period a year earlier, the company said.

Since there has not been an industry-wide improvement in property sales, Country Garden said “its liquidity position is expected to remain very tight in the short- to medium-term”.

Last month, the company made interest payments on two securities before the end of a 30-day grace period.

Country Garden had more than 180 billion US dollars (£147 billion) in liabilities as of June. Evergrande has more than 300 billion dollars (£245 billion).

Last month, a former Chinese official estimated that even China’s 1.4 billion population would not be able to fill all the vacant homes across the country.