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Chinese developer Shimao plans to repay publicly issued debt due in Q4

by Mike Robinson

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© Reuters.

SHANGHAI, (Reuters) – A Chinese developer Shimao Group Holdings told trust companies that it will pay interest and bonds that were publicly issued in the fourth quarter. Financial intelligence provider REDD reported Friday that Shimao Group Holdings had informed these firms.

Shimao will also pay salaries to migrant workers before the Chinese New Years, REDD reported, citing unnamed sources.

Chinese developers are under tremendous pressure this year, as regulators seek to decrease leverage in heavily indebted sectors with restrictions on their ability to issue debt.

Shimao experienced a sharp fall in shares and debt this month due to worries about a sale of assets and the cancellation of apartment deals.

According to REDD the developer asked trust firms to extend short-term loans due.

The trust industry has been asked to wait and it stated that the company expects to release 10 billion yuan ($1.6 million) from pre-sale escrow accounts beginning Jan. 1, REDD reported.

China Merchants Bank, Shimao’s largest creditor plans to increase loan exposure to Shimao at 30% and seek financial support from all other lenders.

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