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China developer Shimao Group’s shares, bonds plunge after missed loan payment -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – A man passes a Shimao Group logo on a wall in Shanghai. In the background are residential buildings and Pudong’s financial district. This was taken in Shanghai, China, January 1, 2013. REUTERS/Stringer

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HONG KONG/SHANGHAI – Shares in Chinese developer Shimao Group Holdings fell on Friday. Trading of key units’ bonds was halted as the company failed to pay a trust loan repayment. This underscores continued pressure on China’s property industry.

After trading closed on Friday, Shimao Hong Kong shares dropped more than 18%, and three Shanghai Shimao Co-traded Bonds were issued. The Shanghai Stock Exchange declared that the trading was disrupted by “abnormal fluctuations”.

According to exchange data, three more Shanghai Shimao bonds were also reduced between 13%-12%. These six bonds were quoted last at distressed levels between 40%-60% of their face values.

China Credit Trust Co announced that Shimao Group had defaulted upon a loan. The company said it was due to pay 645 million Yuan ($101.10million) in late payments.

Shanghai Shimao Construction said Friday in a filing it was in negotiations with China Credit Trust over the unpaid payment. The missed payment will not slow down payment requests on the open bond market.

($1 = 6.3797 yuan)

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