Shimao Seeks Court Approval to Hold Vote on Restructuring Plan
Defaulted developer Shimao Group Holdings Ltd. on Thursday will seek a Hong Kong court’s approval to hold a creditor meeting for a vote on its $11.5 billion restructuring plan, days after it received another liquidation petition.
(Bloomberg) -- Defaulted developer Shimao Group Holdings Ltd. on Thursday will seek a Hong Kong court’s approval to hold a creditor meeting for a vote on its $11.5 billion restructuring plan, days after it received another liquidation petition.
For Shimao, known for its luxury hotel developments, getting the court’s go-ahead is a crucial procedural step as it works to gain backing for its overall debt plan. Creditors holding 80.72% of in-scope debt principal have signaled their support for the proposed restructuring, according to a company filing in December.
It is unclear whether the new wind-up petition will affect the hearing on Thursday. But it complicates the builder’s restructuring path, raising new liquidation risks just as it was amassing creditor support. The new petition was filed by CPYM Link Investment on Monday and a hearing is scheduled for March 19. A Hong Kong court dismissed a separate liquidation case against Shimao last month.
Once among China’s biggest developers, Shimao is one of many builders facing court hearings this month, as the country’s years-long property crisis shows little sign of easing.
Under Shimao’s restructuring proposal, it plans to issue new dollar notes and mandatory convertible bonds to restructure existing debt. The company is expected to implement the restructuring through “schemes of arrangement.” In Hong Kong, that requires 75% in value of participating creditors and a majority in number of each class to vote for the scheme, according to law firm DLA Piper LLP.
The company, which defaulted in 2022, recently slashed the asking price for a Sheraton-branded hotel property near Hong Kong’s airport in an effort to cash in on its offshore assets as it works on its restructuring.
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First Published:16 Jan 2025, 05:13 AM IST
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