Shimao gets second reprieve in liquidation, winning time until August 12 to work out its debt

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.

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.

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.