A prominent group of Shimao Group Holdings Limited (08.13.HK) creditors are reportedly “firmly” opposed to the company’s restructuring proposals of $11.5bn in offshore debt.
Bondholders Opposed to Shimao Group’s Restructuring of Offshore Debt
In a Chinese property landscape full of obstacles, this casts an ever-growing shadow over the property developer’s future.
Based on a Reuters report, the offshore creditors’ financial advisor, Houlihan Lokey, said:
The ad hoc creditor group firmly opposes Shimao’s restructuring proposal, (and) will unequivocally vote against it and other scheme creditors ought to do the same.
The group has not officially provided reasons for their dissent. However, Reuters indicated that three of the Shimao creditors voiced their unhappiness with the significant decrease in repayments and shortfall of upfront and cash repayments over the next four to six years.
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Shimao defaulted on its offshore debt in 2022 after funds issues started in 2021. The company published a detailed restructured debt repayment proposal on Monday, 25 March 2024. This restructuring aims to decrease the firm’s debt by 60%.
To be accepted, 75% in creditor value acceptance is needed. The ad-hoc bondholder group is owed more than 25% of this company’s $6.8bn bonds. Another bank credit group acting on the advice of Deloitte is owed around $4.7bn in loans.
Reportedly, the bank credit group is also unhappy about the proposed debt restructuring. An earlier March 2024 report stated that Deutsche Bank is launching a liquidation lawsuit against Shimao. Should the Shimao creditors agree to the restructuring, they will get a 1.1% consent fee at the end of April 2024 or a 0.6% consent fee at the end of May 2024.
