Another big Chinese property developer faces a liquidation suit

Shanghai-based property giant Shimao Group said on Monday that it had received a liquidation petition from a Chinese state-owned bank in yet another instance of creditors taking legal action to reclaim money from troubled developers in China.

Shimao said it will “oppose the petition vigorously” and will continue to work toward an offshore restructuring that maximizes value for its stakeholders.

The company is of the view that the petition does not represent collective interests of the company’s offshore creditors and other stakeholders.

aggregate/public

China’s massive real estate sector fell into trouble after the government clamped down on excessive borrowing by developers in 2020 in an attempt to cool the property bubble.

In January, Evergrande, the world’s most indebted property developer and the poster child of China’s property crisis, was ordered to liquidate by a Hong kong court.

The liquidation order, made by the City’s High Court, came after the embattled Chinese real-estate giant and its overseas creditors failed to agree on how to restructure the company’s massive debt during talks that went on for 19 months.