Loan payment

Shares and bonds of Chinese developer Shimao Group plunge after defaulted loan payment | The mighty 790 KFGO

HONG KONG/SHANGHAI (Reuters) – Shares in Chinese developer Shimao Group Holdings fell on Friday and trading in some of its key unit’s bonds was halted after the company defaulted on payment of a trust loan, underscoring the ongoing tensions in the Chinese real estate sector.

Shares of Shimao in Hong Kong fell more than 18% after markets opened on Friday, while three Shanghai exchange-traded bonds issued by its unit Shanghai Shimao Co fell more than 20%, triggering breaks in trading on what the Shanghai Stock Exchange called “abnormal fluctuations”. .

Three other Shanghai Shimao bonds fell between 13% and 14%, according to stock market data. All six bonds were last listed at distressed levels of 40-60% of face value.

The falls come after a trust company, China Credit Trust Co, said on Thursday that Shimao Group defaulted on a loan after missing a payment of 645 million yuan ($101.10 million).

Another Shimao unit, Shanghai Shimao Construction, said in a filing on Friday that it was in talks with China Credit Trust to resolve the overdue payment, and the missed payment will not expedite payment claims in the market. open bond.

($1 = 6.3797 yuan)

(Reporting by Clare Jim in Hong Kong and Andrew Galbraith in Shanghai; Editing by Christian Schmollinger and Edwina Gibbs)