Shimao Unit Plays Down Missed Loan Payment: Evergrande Update

(Bloomberg) — A unit of Shimao Group Holdings Ltd. at the center of a missed loan payment said the incident won’t trigger investor demands for accelerated repayment of its debt in public markets.

The business said in a stock exchange filing that it faces liquidity pressure and will take steps to quicken asset sales. It said hasn’t suffered any public-market debt default. 

Shimao’s shares tumbled 18% in Hong Kong in early Friday trading to the lowest since March 2009. The developer’s 4.65% bond due Jan. 15 fell 13%, on pace for its biggest decline in more than three weeks. 

In a sign of wider fallout, a Bloomberg index of total returns on China high-yield dollar bonds fell 1.9% Thursday, the most in two months. 

Key Developments:

  • Shimao Unit Says Trust Matter Won’t Spur Early Bond Repayment
  • China Developers’ M&A Loans to Be Excluded From Metrics: Cailian
  • Shimao Default Notice Hammers Bonds, Stokes China Property Fear
  • Shimao Pledges 265m Shares of Shanghai-Listed Unit for Loans
  • China Seen Delaying Property Tax Trials Until Market Improves

Shimao Unit Plays Down Impact of Loan Miss (9:46 a.m. HK) 

A unit of Shimao Group said it hasn’t suffered any default in public markets, while its missed loan payment won’t trigger demands for accelerated repayment, according to an exchange filing. 

The company said it is faced with liquidity pressure and will take measures to speed up asset sales. 

DaFa Properties Begins Swap Bond Offer (8:59 a.m. HK)

DaFa Properties Group Ltd. has begun an exchange offer for at least $166 million, or 90%, of the outstanding principal amount of its 9.95% 2022 notes, the company said in an exchange filing. The developer said it is also soliciting consents to proposed waivers and amendments from bondholders. 

New notes to be issued for the bond swap will mature on June 30 and will bear a coupon of 12.5%. The offer will expire at 4 p.m. London time on Jan. 12.

Aoyuan in Talks to Sell Offshore Projects (8:45 a.m. HK)

China Aoyuan Group Ltd. is in talks to sell four to five offshore projects with an estimated value of about 3 billion yuan, local media The Paper reported, citing an unidentified person close to the deal. 

Developers’ M&A Loans to Be Excluded From Metrics (7:52 a.m. HK)

Major developers’ loans for mergers and acquisitions won’t be included in China’s “three red lines” metrics on debt, local media Cailian reported, citing unidentified people familiar with the situation. 

Developers were informed by lenders that the adjustment is applicable for property M&A loans that they take on the debt of the target companies, the report said. 

Shimao Default Notice Hammers Bonds (7:30 a.m. HK)

Shimao Group Holdings Ltd., a bellwether for financial contagion in China’s embattled property industry, suffered its biggest-ever bond rout on Thursday after a creditor said one of the developer’s units defaulted on a local loan.

The Shimao unit failed to pay 645 million yuan ($101 million) of a total 792 million yuan due by Dec. 25, according to a notice sent to investors by China Credit Trust Co. The trust firm had demanded early repayment by Dec. 25 after the developer failed to meet installment requirements, according to the notice.

Shimao Pledges Unit’s Shares for Loans (7:25 a.m. HK)

Shanghai Shimao Investment Management pledged 265 million shares, or a 7.06% stake in Shanghai Shimao Co. with Ningbo Commerce Bank Co. Wednesday to fund its operations, according to an exchange filing.

Shimao Investment and two other companies controlled by founder Hui Wing Mau have pledged a combined 560 million shares of Shanghai Shimao, representing a 14.93% stake in the company, as of Thursday. 

©2022 Bloomberg L.P.


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