Chinese Developer Shimao Faces Liquidation Order Over US$200m Loan

• 16 April 2024
• International News
• 985 Views

Chinese property developer Shimao Group is facing a liquidation petition filed by China Construction Bank (Asia) over a financial obligation of HK$1.6 billion (US$204 million), according to the company’s statement released on Monday and updated by Business Times on 8 April 2024.

In a filing to the Hong Kong stock exchange, Shimao Group announced its intention to “vigorously” oppose the lawsuit and proceed with its proposed plan to restructure approximately US$11.7 billion of offshore debt, aiming to reduce it by 60%.

Shimao Group emphasised that “The company is of the view that the Petition does not represent the collective interests of the company’s offshore creditors and other stakeholders”.

China Construction Bank has yet to respond to requests for comment regarding the matter.

This move follows similar actions taken by creditors against major players in the property sector, including China Evergrande Group and Country Garden.

China’s property sector has been grappling with a crisis since 2021 due to a regulatory crackdown on high leverage among developers, which led to a liquidity crisis. Despite this, mainland authorities have opted for incremental measures instead of massive stimulus to revive the sector.

• Economy and Finance