Chinese developer Glorious Property Holdings Ltd. paid a semi-annual coupon that was due Sept. 4 on its 2018 dollar bonds, according to people familiar with the matter.

A $26.5 million payment on the notes was deposited to holders’ accounts, according to investors who own the securities. Some creditors approached lawyers last week to prepare for a possible restructuring of the company’s debt, according to people familiar with the matter. The builder has $300 million of dollar securities coming due Oct. 25, more than nine times the 204.9 billion yuan ($32.2 million) in cash it reported at the end of June.

Glorious Property, controlled by tycoon Zhang Zhirong, is selling assets and negotiating with lenders after falling behind in servicing 10.5 billion yuan of loans. The Shanghai-based developer had failed to pay 1.82 billion yuan of principal and interest on 5.4 billion yuan of debt as of June 30 when it consolidated its first-half results, according to an Aug. 31 Hong Kong stock exchange filing.

Doris Chung, a spokeswoman at Glorious Property, couldn’t immediately be reached for comment. A spokeswoman at the company’s external public relations firm declined to comment.

Moody’s Investors Service and Standard & Poor’s have flagged bond default risks this year after downgrading Glorious Property’s notes in April. S&P cut the company’s credit score to CC on Sept. 2, saying its liquidity position had worsened. 

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