Chinese developer Shimao plans fire sale after downgrade and missed payment

[Eugene]

Source: The Guardian

Chinese developer Shimao plans fire sale after downgrade and missed payment

Fears over contagion mount as a company once considered financially sound is running out of cash to pay its debts

Martin Farrer
Tue 11 Jan 2022 06.24 GMT

A Chinese developer previously considered financially sound is embarking on a fire sale of assets as the contagion of bad debts built up within China’s bloated housing sector continues to spread.

Shimao Group Holdings, which is in the top dozen Chinese property companies, was plunged into crisis after it said it defaulted a trust loan last week after missing a 645m yuan ($101m) payment that it guaranteed.

Its situation worsened on Monday night when its credit rating was downgraded to junk status by S&P.

-snip-

Shimao denied in a filing to the Hong Kong stock exchange on Tuesday that it was selling its flagship Shimao International Plaza in Shanghai for more than 10bn yuan ($1.6bn), but did concede that some of its 455bn yuan ($71bn) of assets were up for grabs.

-snip-

Read more: https://www.theguardian.com/world/2022/jan/11/chinese-developer-shimao-plans-fire-sale-after-downgrade-and-missed-payment

[Kaleva]

1. Putting money in real estate is about the only investment the avg Chinese can make

Families combine together to buy real estate with the idea the value will continue to skyrocket.