Chinese builder Shimao’s liquidation case is dismissed by court

SHIMAO Group Holdings won a Hong Kong court decision to dismiss a creditor petition to liquidate the defaulted Chinese developer, buying more time to complete its debt restructuring plan.

The Hong Kong High Court granted the dismissal on Monday (Dec 2) after the company said in an October filing that some banks and bondholders have indicated their approval of its US$11.5 billion restructuring plan with some sweeteners added.

The development adds to the momentum gained by Shimao to push through the restructuring plan and continue operations. Once one of China’s biggest developers with five-star hotels as its landmark projects, the company was on an expanding list of distressed builders facing legal battles that were launched by creditors frustrated with a lack of progress on overhauling debt.

Shares of Shimao rose as much as 8.1 per cent on Monday in Hong Kong. Most of its offshore bonds were indicated at less than 7 US cents as at Nov 29, according to Bloomberg-compiled data.

After Shimao disclosed some creditors’ indications of approval, the company asked for a hearing on Jan 16, when it will request a meeting for a vote on the plan.

The wind-up petition was filed by China Construction Bank (Asia) Corp in April, becoming one of the most prominent examples of a state-backed bank trying to reclaim money from a distressed builder. BLOOMBERG