Central China's CEO confirmed on Friday it had written to the provincial government in early August asking for help.

But he would not confirm the authenticity of a letter widely circulated on social media in which the company had purportedly said it was facing liquidity issues that could potentially cause it to default on its debts.

Many Chinese developers are facing financial stress after policymakers rolled out more credit-tightening measures this year to curb debt levels in the sector and cool rising home prices. But Central China's operations were also badly hit by heavy flooding in parts of the country this summer and new outbreaks of COVID-19.

However, group Chief Executive Officer Wang Jun told Reuters in an interview that its property flagship unit, Central China Real Estate (CCRE), is now in much better shape thanks to relief measures rolled out by the Henan government in mid August, including tax reductions and delaying home delivery times to buyers.

CCRE now has 18 billion yuan ($2.80 billion) in cash, up from 16.5 billion yuan in June, lifted by robust August sales, he said.

By comparison, CCRE had 28.3 billion yuan of interest-bearing debt at end-June, according to its first-half earnings statement, down 9.6% from end-December.

The developer has $400 million in place to remit offshore to repay its dollar bond due in November, Wang said. The next maturity is a $500 million bond due in August.

"On a good note we only have one dollar bond maturity in the whole of 2022, so even if the capital market next year is in the state like this year, we are still very confident and capable of repaying," he said, adding its bank loan channels have not been affected by China's credit tightening policies for the real estate sector.

Moody's revised CCRE's outlook to "negative" last week, citing a challenging operating environment and weakened access to offshore funding.

Offshore bonds account for 65% of CCRE's total debt, and Wang said the firm will lower its offshore debt first as it aims to cut its net debt ratio to 50-60% by year-end from 93% in June.

CCRE also repurchased $2.7 million of 2023 notes on Thursday, and Wang said the company plans to continue buybacks.

In addition, the company is considering options for its investment properties including REITs and taking on new investors as it deleverages, he added.

In the purported letter to the Henan government which had circulated on social media, Central China said it was seeking payment of 5 billion yuan that the government owed the company and asked for other forms of assistance.

Central China, a major employer in Henan, said over one million of its staff could face job losses, "potentially causing a series of social problems" if it ceases operation.

The Henan government did not immediately respond to Reuters request for comment.

Shares of CCRE closed up 6.3% on Friday, versus a 1.9% rise in the broader market. In the three months through Thursday, the stock had lost over 20%.

($1 = 6.4473 Chinese yuan renminbi)

(Reporting by Cheng Leng and Ryan Woo in Beijing and Clare Jim in Hong Kong; Editing by Kim Coghill)