China’s Shimao faces liquidation suit over failure to pay $202 million loan

(Tiafx) – Shimao Group said on Monday China Construction Bank (OTC:CICHF) (Asia) had filed a liquidation lawsuit against the Chinese developer over a financial obligation of HK$1,579.5 million ($201.75 million).

“The company is of the view that the petition does not represent collective interests of the offshore creditors and other stakeholders,” Shimao said in a stock exchange filing, adding it will oppose the lawsuit and continue with its debt restructuring plan.

Last month, Shimao laid out detailed restructuring terms to revamp its $11.5 billion offshore debt with an aim to cut its debt by 60% last month.

Shanghai-based Shimao is among the many Chinese developers that have defaulted on offshore bonds, after it missed the interest and principal payment for a $1 billion offshore bond in July 2022.

It is also the latest Chinese developer to face a liquidation lawsuit.

China Evergrande (HK:3333) Group, the world’s most indebted property developer, was ordered to be liquidated by the Hong Kong court in January, and a liquidation petition has also been filed against Country Garden.

($1 = 7.8289 Hong Kong dollars)