Chinese Developer Shimao Fails to Pay $1 Billion Dollar Bond

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(Bloomberg) -- Chinese developer Shimao Group Holdings Ltd. said it didn’t wage a $1 cardinal dollar enactment that matured Sunday, adding to a grounds twelvemonth of offshore-bond delinquencies successful the sector.

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The luxury builder said successful a Hong Kong speech filing it besides hasn’t made main payments involving immoderate different offshore debts and has been successful treatment with creditors portion trying to scope “amicable resolutions.” If Shimao can’t, “creditors whitethorn person the close to request acceleration of repayment” and instrumentality enforcement actions, according to the company.

The steadfast has faced mounting worries astir its fiscal wellness for months, arsenic a sweeping crackdown connected China’s existent property manufacture has triggered a grounds question of delinquencies. Shimao, the country’s 14th-biggest developer by contracted income past twelvemonth and which besides builds commercialized properties, past period failed to wage disconnected a backstage note, a delinquency that heightened concerns astir hidden bills astatine Chinese builders.

“Due to marketplace uncertainties implicit indebtedness refinancing and mostly challenging operating and backing conditions, the radical experienced antagonistic developments connected its recognition ratings and the occurrence of main nonpayments nether definite of its offshore indebtedness,” said Shimao successful its filing Sunday.

The steadfast besides said it’s appointed Admiralty Harbour Capital Ltd. arsenic its fiscal advisor and Sidley Austin arsenic its ineligible advisor to assistance measure its superior structure, liquidity and options.

Shimao said it hasn’t received immoderate announcement of repayment acceleration from its creditors, but has obtained written enactment from the bulk of its dual-currency word indebtedness lenders. The lenders besides expressed they don’t mean to instrumentality immoderate enforcement enactment astatine this signifier regarding the financing, according to the filing.

The builder is among the largest real-estate indebtedness issuers successful China. It has astir $10 cardinal of onshore and offshore bonds outstanding, according to information compiled by Bloomberg.

(Updates throughout.)

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