Shimao Group faces winding-up petition from China Construction Bank, signalling developer is in ‘serious debt trouble’
- The chances of Shimao ‘successfully restructuring its debt and paying back its creditors in the short term is pretty low,’ says analyst
- The Shanghai-based developer vowed to ‘vigorously’ oppose the winding-up petition, while working towards restructuring its offshore debt
In a filing to the Hong Kong stock exchange on Monday, the Shanghai-based developer vowed to “vigorously” oppose the winding-up petition, which it said “does not represent collective interests of the company’s offshore creditors and other stake holders”, while working towards restructuring its offshore debt.
Shimao urged its offshore creditors to “carefully consider” the restructuring plan put forward on March 25, in which it presented four options including short-term and long-term notes offering an aggregate principal amount of no more than US$4 billion, according to an earlier stock exchange filing.
“This is one of the first instances where a property developer has faced a winding-up petition from a large, state-owned commercial bank, which means that Shimao is facing serious debt trouble,” said Shen Meng, director at Chanson & Company, a Beijing-based boutique investment firm.
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“The chances of it successfully restructuring its debt and paying back its creditors in the short term is pretty low.
