China has placed debt-laden Country Garden Holdings Co (2007.HK) on a draft list of 50 developers eligible for a range of financing support, Bloomberg reported on Wednesday, citing people familiar with the matter.
Other distressed developers, such as Sino-Ocean Group (3377.HK) and CIFI Holdings (0884.HK) also figure on the list, it added.
Mounting problems in the cash-squeezed and indebted property sector, which accounts for a quarter of China's economic activity, have sparked fears of a broader financial crisis and weigh heavily on economic growth and consumer confidence.
Authorities are keen that any risks posed by Country Garden's liquidity problems should not spill over to the wider economy, three sources told Reuters this month as talk swirled of various rescue plans.
Country Garden declined to comment. Sino-Ocean and CIFI did not immediately reply to queries from Reuters on Wednesday.
Regulators are set to finalise the list and distribute it to banks and other financial institutions within days, Bloomberg said, citing unnamed sources.
Once China's biggest private property developer, Country Garden missed a coupon payment in October, triggering default terms.
It is unclear what specific measures will be taken to support the developers on the draft list.
The latest news shows China's government has drastically turned its attitude towards the property sector, with more active support measures, in a step "positive for the industry," said Ting Meng, a credit analyst at ANZ Bank China.
"However, for defaulted developers, any new cash injection will prioritise the delivery of homes, rather than debt repayment," she said, adding that resolving the debt problems would hinge on future restructuring negotiations.
The biggest hurdle to a real property recovery is still "the massive number of overdue housing projects in low-tier cities," brokerage Nomura said in a research note on Tuesday.
It added that it expected Beijing would eventually "rescue some major troubled developers and fill the vast funding gap for building and delivering those presold homes".
Many Chinese property developers that defaulted on debt over the past two years face challenges finishing housing projects.
With nearly $11 billion of offshore bonds and $6 billion of onshore loans, Country Garden said after the default that it would make sure of home delivery and told some creditors it was targeting a rough offshore debt restructuring plan before year end.
