Shimao Shares Fall After China Bank Files Liquidation Petition
By Jiahui Huang
Shimao Group shares fell sharply after a Chinese state-run bank, in a rare case, filed a liquidation petition against the heavily indebted developer in Hong Kong, adding uncertainty to a proposed restructuring of billions of dollars of offshore debt.
Shares were 14% lower at 39 Hong Kong cents after Shimao said Monday that Construction Bank (Asia) Corp. filed a winding-up petition with a Hong Kong court on April 5 related to a financial obligation of around HK$1.58 billion (US$201.8 million). Shimao said it would "vigorously" oppose the petition and continue working on plans proposed last month to restructure more than $11 billion of offshore debt.
A hearing in the case is set for June 26, Hong Kong court records showed.
Shanghai-based Shimao's shares have fallen 40% this year and 91% over the past 12 months amid continued losses, debt concerns and a slowdown in the Chinese property sector.
The company posted net losses of 21.03 billion yuan (US$2.91 billion) in 2023 and CNY21.49 billion in 2022, while total equity and total liabilities stood at CNY51.25 billion and CNY492.00 billion, respectively, at the end of last year.
China is in the midst of a protracted slump in the property sector, historically a major driver of the country's economic growth.
Property giant China Evergrande was ordered to liquidate earlier this year in the face of mounting operational and debt stresses, a process that was started by overseas creditors. A number of other companies are awaiting outcomes of liquidation petitions.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
April 08, 2024 00:19 ET (04:19 GMT)
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