OCBC Bank sues Shimao over unpaid debts
A CHINESE developer has been sued by a Singapore bank over a loan-repayment demand, in the latest sign that creditors to the nation's distressed property firms are growing increasingly impatient.
OCBC Bank filed a claim against Shimao Group Holdings and a unit regarding a revolving credit facility agreed to in October, showed a Hong Kong court filing last week by OCBC.
Elsewhere, China Evergrande Group's onshore unit will next week meet with holders of a yuan bond to vote on a proposed interest payment extension.
After another rough week for Chinese markets, focus is on what policymakers may do next.
Optimism generated by Beijing's support pledges last month has continued to falter.
A Bloomberg Intelligence index of developer shares looks poised for a second consecutive weekly decline, despite edging higher on Friday (Apr 22).
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After demanding repayment of US$100 million plus interest in January from the unit, which borrowed the funds, principal of US$49.2 million had yet to be repaid by Mar 2 and OCBC is seeking that amount plus interest, the filing said.
Luxury builder Shimao had long been considered one of China's healthier property firms, and its mounting debt problems have been seen as a bellwether for financial contagion in the nation's embattled property industry.
The slump in Chinese equities and corporate bonds is paring a rebound, sparked by vows for policy action, which lasted for a couple weeks from mid-March.
But patience for more details is wearing thin, intensifying growing capital outflows. Any renewed rally ahead could only be sustained if concrete and significant policy steps were taken rapidly, said Jean-Louis Nakamura, chief investment officer for Asia-Pacific at Lombard Odier. BLOOMBERG
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