Shimao fails to repay 4¾% notes, misses payments on other debt

By Marisa Wong

Los Angles, July 5 – Shimao Group Holdings Ltd. announced that principal non-payments under some of its offshore debt have occurred due to market uncertainties over debt refinancing and generally challenging operating and funding conditions, despite its continuing efforts to enhance its liquidity position.

Specifically, Shimao has not paid the $1,023,750,000 of principal and accrued interest due on its 4¾% senior notes due July 3, 2022 (ISIN: XS1637274124), according to a company notice.

In addition, the group did not make principal payments under some other offshore debt and has been maintaining ongoing discussions with the relevant creditors, aiming to reach amicable resolutions. If the group is unable to reach consensual resolutions with respect to that debt, there may be acceleration of repayment and creditors may take enforcement actions against the group.

As of July 3, the company had not received any notice of acceleration of repayment from its creditors and has received written notice of support from the majority of the lenders of its dual currency term loan facilities under the facility agreement dated Sept. 14, 2018 with HSBC as facility agent and its dual currency term loan facilities under the facility agreement dated Aug. 9, 2019 with HSBC as facility agent.

The 2018 syndicated loan and the 2019 syndicated loan represent a meaningful portion of the group’s offshore debt. Those lenders have expressed that they are generally supportive of the company continuing to explore the possibility of an agreement and implementation of a potential restructuring with its relevant stakeholders and are willing to work with the company in a way that supports the company continuing to run its business with minimum disruption.

Those lenders also expressed that it is not their present intention to take any enforcement action or other steps in recovering or enforcing payment of amounts outstanding under the 2018 and 2019 syndication loans.

Shimao said it will “endeavor to continue to actively engage with its creditors and seek to implement an optimal solution that strives to treat its creditors fairly and protect the interests of the group’s stakeholders.”

The real estate development company is based in Hong Kong.

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