Chinese developer Shimao Group has been issued with a winding-up petition from China Construction Bank, in a rare instance of a state-owned bank taking a hard line with a struggling developer.
The petition was filed on Friday and is related to a debt of approximately $201m owed by the Shanghai-based company.
Shares, which have lost a third of their value since the start of the year, fell by more than 15% during trading on the Hong Kong stock exchange on Monday.
Shimao commented in the filing that, in its view, the petition did not “represent the collective interests of the company’s offshore creditors and other stakeholders”.
It said: “To protect interests of its stakeholders, the company will oppose the petition vigorously and continue to work towards an offshore restructuring that maximises value for its stakeholders.”
Shimao has been in business for more than 30 years. As well as developing some 460 projects in more than 100 cities across China, it manages 163 hotels and seven theme parks.
As of the end of last year, the group employed 53,836 people and reported total liabilities of $68bn.
The bank has taken action in the wake of other liquidation orders aimed at developers Evergrande and Country Garden.
All these companies have defaulted on debt repayments, following a government decision, taken in 2021, to restrict borrowing, coupled with the impact of the Covid pandemic.
Jeff Zhang, an analyst at financial consultant Morningstar, told the Bloomberg news agency that it was possible the bank was using the petition as leverage, “to push the developer to make progress on restructuring”.
Shimao first defaulted on offshore debt in July 2022, but a restructuring plan was not issued for 17 months.
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