Embattled Chinese developer Shimao Group Holdings has been given a four-week reprieve by a Hong Kong court giving it more time to secure lenders’ approval for its debt restructuring proposal, as the city sees a rise in the number of creditor-led liquidation petitions.
Justice Jack Wong Kin Tong on Wednesday adjourned the case to July 31, in the first hearing since China Construction Bank (Asia) filed a liquidation petition in April after Shimao failed to repay its dues of HK$1.58 billion (US$202 million).
In a filing to the Hong Kong stock exchange in April, Shimao said it “vigorously” opposes the winding-up petition, while working towards restructuring its offshore debt.
Founded in 1989, Shimao is one of top 25 developers in China by sales. It has 280 projects across China as of end-2023, including five-star hotels in Shanghai, according to its latest annual report.
Shares of Shimao fell 1.3 per cent to 75 Hong Kong cents on Wednesday after the court hearing, nearly halving from year-highs struck last month. Its shares were delisted from mainland markets last month under local rules after its shares traded below 1 yuan for 20 straight days.
Its peer Kaisa Group Holdings got a similar reprieve from the city’s court on Monday, but was warned to exhibit progress in the restructuring process to avoid a possible liquidation at a hearing scheduled for August. Country Garden Holdings faces a court hearing on July 29 in connection with a liquidation petition.
Dexin, a medium-sized developer in China eastern Zhejiang province, was ordered to liquidate earlier this month by a Hong Kong court after it failed to make debt repayments in a timely manner.