Shimao gets court approval to hold vote on restructuring plan

DEFAULTED developer Shimao Group Holdings received a Hong Kong court’s approval to hold a creditor meeting for a vote on its US$11.5 billion restructuring plan, days after it received another liquidation petition.

The company will conduct the vote on Feb 14, and the court will hold a hearing to sanction the debt plan on Mar 13.

For Shimao, known for its luxury hotel developments, getting the court’s go-ahead is a crucial procedural step as it works to gain backing for its overall debt plan. Creditors holding 80.72 per cent of debt principal under the restructuring have signalled their support for the proposal, according to a company filing in December.

The new wind-up petition complicates the restructuring path for Shimao, which defaulted in 2022, raising new liquidation risks just as it was amassing creditor support. The new petition was filed by CPYM Link Investment on Monday (Jan 13) and a hearing is scheduled for Mar 19.

A Hong Kong court dismissed a separate liquidation case against Shimao last month.

The company recently slashed the asking price for a Sheraton-branded hotel property near Hong Kong’s airport, in an effort to cash in on its offshore assets as it works on its restructuring.

SEE ALSO

Distressed Chinese companies face flurry of court hearings

China’s Shimao drops 15% after developer receives liquidation petition

Shimao cuts asking price for Hong Kong’s second-largest hotel: source

Once among China’s biggest developers, Shimao is one of many builders facing court hearings this month, as the country’s years-long property crisis shows little sign of easing.

Under Shimao’s restructuring proposal, it plans to issue new US dollar notes and mandatory convertible bonds to restructure existing debt. The company plans to implement the restructuring through “schemes of arrangement”. In Hong Kong, that requires 75 per cent in value of participating creditors and a majority in number of each class to vote for the scheme, according to law firm DLA Piper. BLOOMBERG