HONG KONG: Shares of cash-strapped Chinese property developer Shimao Group eased on Thursday, after it sought to extend payments on a $947 million trust loan and reports said a court had frozen the sale of 178 apartments financed by the loan.
Shimao on Wednesday offered creditors to repay the onshore trust loan in the states over the next three years, of which 1.3 billion yuan ($205.36 million) would become due on Thursday, sources told Reuters.
The trust loan was used to fund a large mixed-use development in Shenzhen. Financial news site Cailianshe reported that 178 unsold apartments in the development have been frozen by legal authorities.
Shares of the Hong Kong-listed company were down 1.4% at midday, down from a 3% decline earlier. This compares to a 1.1% loss in the mainland Hang Seng property index.
Shimao’s plan to extend loan repayments has yet to be approved by creditors, and some creditors have said they are unhappy with the proposal which offers no credit improvements.
The Shanghai-based developer, which defaulted on a trust loan last month, has been scrambling to extend its debt to creditors and have assets to raise funds.
The company also said at Wednesday’s meeting that it was in talks, facilitated by the Shenzhen government, with state-owned companies to bring strategic investors into the development.
($1 = 6.3303 Chinese yuan renminbi)
(Reporting by Clare Jim in Hong Kong and Jason Xue in Shanghai; Editing by Rashmi Aich)