Shimao Group's liquidation hearing in Hong Kong has moved to August 12, which gives the company additional time to finalise a revised restructuring proposal with creditors. The petition, filed by China Construction Bank (Asia) over USD 200 million in unpaid loans, follows Shimao's 2022 default on USD 11.5 billion in offshore debt. Recent updates to Shimao's restructuring plan include a minimum cash interest payment for new notes and a reduction in bond conversion prices. The company has extended the deadline for an early consent fee to August 30. The outcome is crucial for Shimao and the wider Chinese property market.
Earlier this week Shimao Group, the distressed Chinese property developer, announced that a Hong Kong court has postponed its liquidation hearing until August 12. This extension provides Shimao additional time to finalise a revised restructuring proposal with its creditors. The debt crisis has plagued the real estate sector since 2021, causing many developers, including the prominent China Evergrande Group, to face liquidation proceedings.
In a brief stock exchange filing, Shimao disclosed that the High Court has rescheduled the petition hearing to August 12. The petition, lodged in April by China Construction Bank (Asia), pertains to Shimao's default on approximately USD 200 million in loans. The Shanghai-based company, which defaulted on offshore debt of USD 11.5 billion in 2022, recently updated its restructuring terms to address creditor concerns and gain support.
The revised plan addresses objections raised against the initial proposal disclosed in March. The updated terms include several key adjustments: a guaranteed minimum cash interest payment for new notes, an enhanced guarantee and security package, and a reduced conversion price for mandatory convertible bonds, now set at HK USD 6 (USD 0.77) per share, down from HK USD 8.5.
Shimao has also extended its deadline for an early consent fee, an inducement for creditors to support the restructuring plan, to August 30. This extension marks the fourth adjustment to the deadline. In a related development, Times China, a smaller competitor, had its liquidation hearing rescheduled to August 12. On the same day, Kaisa Group will have its next liquidation hearing, which could be among the final proceedings before the Hong Kong High Court delivers its verdict.
The adjournment highlights Shimao's continued efforts to resolve its financial challenges and negotiate a feasible restructuring plan. The outcome of this process will have significant implications, not only for Shimao but also for the broader Chinese property market, which remains burdened by extensive debt and ongoing liquidity issues.
Advertisement
Facebook
Whatsapp
