Deutsche Bank to file liquidation suit against Chinese developer Shimao

Business Times  Published Fri, Mar 01, 2024 · 4:10 pm

Shanghai-based Shimao is among the many Chinese developers that have defaulted on offshore bonds, after it missed the interest and principal payment for a US$1 billion offshore bond in July 2022.

PHOTO: REUTERS

DEUTSCHE Bank is preparing a liquidation lawsuit in Hong Kong against Chinese developer Shimao Group, two sources said, in a rare move by a foreign firm that comes amid rising credit defaults and China’s deepening property-sector crisis.

Shanghai-based Shimao is among the many Chinese developers that have defaulted on offshore bonds, after it missed the interest and principal payment for a US$1 billion offshore bond in July 2022.

After that missed payment, its entire US$11.7 billion worth of offshore debt is deemed to be in default.

The German bank, which is one of the creditors of Shimao, is looking to file the petition this month after it found the developer’s debt restructuring terms unacceptable, said the two people with knowledge of the matter. Both sources declined to be identified as the matter is not public.

Deutsche Bank declined to comment. Shimao did not respond to Reuters’ queries.

Once a top 20 developer in China, Shimao presented its offshore debt restructuring terms to creditors in December last year after 18 months of negotiations with them.