Shimao jumps the most on record after report of builder's asset sale talks

Hong Kong

EMBATTLED Chinese developer Shimao Group Holdings' shares jumped the most on record after REDD reported it is in talks with a bigger rival on asset disposals.

The company's stock closed 19 per cent higher in Hong Kong on Monday (Jan 10), while subsidiary Shanghai Shimao surged by the 10 per cent daily limit in Shanghai. Shimao's dollar bonds also climbed.

The moves followed REDD's report that China Vanke is in talks to acquire assets from Shimao, citing an unidentified source close to the latter. Investor relations officials at both companies said they had no update when reached by Bloom-berg.

Shimao, a bellwether for financial contagion in China's property industry, is the latest developer to come under pressure to pay its debt. Long considered one of the healthier builders, Shimao Group had until recently appeared largely unscathed even as junk-rated rivals including China Evergrande Group and Kaisa Group Holdings defaulted.

Separately, the builder has commissioned agents in Hong Kong to speed up the disposal of its assets amid a missed loan payment, Caixin reported on Sunday.

The company is seeking buyers such as funds and international investors mainly for its commercial properties, including those owned by its Hong Kong-listed real estate unit, reported Caixin. BLOOMBERG