Shimao Group Holdings has received the second reprieve in a month to restructure its debt, after a Hong Kong court granted the Shanghai company more time to work out with creditors how to repay HK$1.58 billion (US$202.3 million) of borrowings.
The liquidation case brought by China Construction Bank (Asia) against Shimao will be heard on August 12, according to a July 31 ruling by Justice Jack Wong Kin-tong of the Hong Kong High Court. The hearing for the case, filed in April, was previously adjourned on June 26.
The extra time granted to Shimao came after the company amended the terms of its debt restructuring, including changes to the redemption and repayment schedules, according to a filing last Friday to the Hong Kong stock exchange.
Lawyers representing both petitioner and the company had sought a 10-week adjournment at the hearing, before the Justice made the decision.
Shimao’s lawyers said more time is needed for creditors to review the revised term sheet. A lawyer representing the petitioner said a 10-week adjournment will “save time and costs”.
The revisions are “beneficial” to its creditors, including bondholders and certain bank lenders, Shimao said in its filing, adding that a “significant portion” had acceded to the amended agreement.
The cash-strapped developer has been restructuring US$11.7 billion worth of offshore debt to avoid liquidation since March 25. That proposal offered four options including an exchange offer of short-term and long-term notes with an aggregate principal amount of a maximum US$4 billion.
In a filing to the Hong Kong stock exchange in April, Shimao said it “vigorously” opposes the winding-up petition. The suit case came amid a growing number of winding-up petitions received by Chinese builders over the past few months.
Shimao is not the only developer to get extra time. Times China, a property developer based in Guangzhou, also received a two-week reprieve on Wednesday on the liquidation suit filed in April by Hang Seng Bank. The developer said in a June filing that it had reached an agreement with an ad hoc group of offshore creditors holding more than 25 per cent of notes on a restructuring proposal.
Country Garden Holdings, once China’s largest developer by sales, got a near 6-month reprieve to restructure its debt in a Monday hearing. Kaisa Group Holdings, however, faces the risk of liquidation ahead of a key winding-up hearing in two weeks, after it was warned no further adjournment would be given without evidence of progress at the next hearing.
