Visitors pass by a booth of Greentown at a real estate show. [CFP]

Song Weiping, chairman of Hangzhou-based real estate developer Greentown Group, denied his company faces impending bankruptcy. In a post on the popular microblogging site Sina Weibo Wednesday evening, Song said the company is fine and far from going bankrupt.

Rumors about Greentown Group's solvency spread quickly yesterday after a journalist said he had received a tip from an insider that a bombshell would hit the Hangzhou real estate market as early as this week, hinting at problems with the indebted property developer.

The Hong Kong-listed firm has become a frequent target of business gossip in recently weeks. Earlier reports said Hainan Airlines had offered a 3 billion yuan (US$472 million) to acquire the company, China's banking regulator had demanded an investigation into its real estate trust business and company management was considering delisting the firm from the Hong Kong Stock Exchange.

A spokesman for Greentown said the bankruptcy rumor may be a result of speculation recent price cuts. He also added that the company is operating normally, and no panic has been felt in-house.

But analysts believe Greentown faces substantial difficulties, citing its stubbornly high debt-to-asset ratio and poor sales on high-end developments due to government-imposed restrictions on home purchases.

An interim report by Greentown showed its debt-to-net-asset ratio rose to 163.2 percent from 132 percent at the end of 2010.

Song Weiping admitted that the real estate industry is facing a "critical moment" as the government imposes stern measures to rein in housing prices, but insisted the company has a contingency plan and everything is under control so far.

China's business press carried the story above on Thursday.

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