China property developer Shimao faces liquidation petition from state-owned bank By Reuters
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 08 2024
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Source: Investing.com
- Shimao Group Facing Liquidation Petition: Chinese property developer Shimao Group is being pursued by China Construction Bank (Asia) in Hong Kong for failing to repay loans, marking a rare offshore legal action by a state-owned bank against a mainland developer.
- Financial Impact on Shimao: Shimao's Hong Kong-listed shares plummeted by 12.1% to an all-time low following the news of the liquidation petition.
- Debt Restructuring Plans: Shimao aims to restructure about $11.7 billion of offshore debt, intending to reduce it by 60%, and plans to vigorously oppose the lawsuit filed by CCB.
- Challenges in Debt Restructuring: A group of major bondholders has opposed Shimao's restructuring plans due to potential losses they may face and lack of upfront payments, requiring approval from over 75% of creditors to pass.
- Industry Context: The Chinese property sector has been in crisis since 2021 due to regulatory crackdowns, triggering liquidity issues among developers, with Shimao being one of many that have defaulted on offshore bonds.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
