Shimao Group’s Shanghai unit defaults on US$101m project loan in latest blow to China’s embattled property market
- Developer’s subsidiary fails to fulfill obligation as a guarantor for a trust product, China Credit Trust tells investors
- Shimao’s share price and bonds slump, though it denies defaulting “on any loan in the open market”
Shanghai Shimao Construction Company failed to repay the proceeds as a guarantor for a project that raised funds for Shanghai Qianyi Construction Materials Company, according to a notice sent to investors on Thursday by China Credit Trust (CCT), the trustee for the loans.
Shanghai Shimao Construction, a Shimao Group subsidiary, indirectly owns a 30 per cent stake in the materials suppler, the group said in an announcement on Friday.
As of Thursday, CCT said it had only received 147 million yuan (US$23 million) of the 792 million yuan that was due by December 27. The failure to make the payment constituted a default on the trust loan, CCT said in the note seen by the Post.
01:29
New Evergrande protests amid reports troubled Chinese property giant ordered to raze development
