Shimao Group Investing.com drops the unit’s default loan

Author: Gina Lee

Investing.com – Shimao Group Holdings Ltd., Shanghai Shimao Co. Ltd. the price of bonds issued by flagship units has also fallen after one of its units defaulted on a loan.

Shares of the Shimao Group fell 7.04% to HK $ 4.62 ($ 0.72) at 23:27 ET (4:27 AM GMT) after falling more than 17% earlier on Friday. The July 2022 Shanghai exchange-traded bond issued by Shanghai Shimao also fell by more than 25%, causing a disruption in trading on what the Shanghai Stock Exchange called “abnormal fluctuations”.

The Bloomberg index fell 1.9% in total Chinese bond yields on Thursday, a two-month high, which could be a sign of a broader fall.

The Shimao Group suffered its biggest bailout failure on Thursday after a creditor said one of the developer’s units was paying off a local loan. The unit failed to pay CNY 645 million ($ 101.10 million) in total by CNY 792 million by December 25, according to a note from China Credit Trust Co., which was sent to investors. China Credit Trust requested an early repayment by Dec. 25 when the developer failed to meet the installment requirements, the statement added.

However, the unit, which lost the payment, said in a statement to the stock exchange that the incident did not require investors to repay the debt quickly in public markets. The file added that the unit is under liquidity pressure and will take steps to accelerate asset sales, stressing that the unit should not be subject to public market debt.

Meanwhile, Shanghai Shimao Investment Management on Wednesday traded 265 million shares, or 7.06% a stake in Shanghai Shimao, to finance Ningbo Commerce Bank on Wednesday, according to an exchange dossier. The other two companies controlled by Shanghai Shimao Investment Management and Founder Hui Wing Mau have taken a 560 million stake in Shanghai Shimao, or a 14.93% stake in the company, as of Thursday.