One of China’s major state banks, China Construction Bank (CCB), has filed to liquidate real estate developer Shimao Group Holdings in Hong Kong, in a further development of China’s severe real estate crisis. The developer himself announced this in a communication to the Hong Kong Stock Exchange.
CCB filed last Friday to liquidate Shimao over an unpaid debt of 1.58 billion Hong Kong dollars (186 million euros), the developer revealed in a disclosure to the Hong Kong stock exchange on Monday.
Shimao promised in the communication that it will “strongly oppose the application and continue to work towards an offshore restructuring that maximizes value for its stakeholders.” He also said the application does not represent the “collective interests” of his offshore creditors and other stakeholders.
Two weeks ago Shimao proposed new restructuring solutions for 10.6 billion euros in offshore debt. But these assumptions have not satisfied some of the main creditors.
Shimao’s situation adds to that of other important players in the Chinese real estate sector. Country Garden is the subject of a liquidation application which will be heard in Hong Kong on May 17. While in January a court in the former British colony ordered the liquidation of the giant Evergrande, after the developer failed to reach an agreement with creditors to restructure further
Shimao’s revenue for 2023 fell 5.7% year-on-year to 59.46 billion yuan (7.6 billion euros).
China Construction Bank, for its part, saw substandard loans related to the real estate sector grow by 43.3% to 48.2 billion yuan (6.1 billion euros) in 2023.
