Times China faces winding-up petition
Hang Seng Bank takes action against developer over US$266m of debts
Hang Seng Bank has filed a winding-up petition in the High Court against debt-laden property developer Times China Holdings for financial obligations amounting to US$266 million, sending the shares of the defaulted firm plummeting.
It follows a liquidation suit brought last week by China Construction Bank, the country’s second-largest lender, against another developer, Shimao Group Holdings, in connection with financial obligations of around HK$1.58 billion.
Shares in Times China fell by as much as 49.6 per cent after the announcement yesterday.
The winding-up petition comes after the developer reported poor sales as the mainland’s housing market continued its downward spiral despite policy measures aimed at boosting the sector.
Founded in 1999, Guangdongbased Times China reported contracted sales for the three months to March 31 tumbled by 72 per cent to 1.53 billion yuan (HK$1.69 billion) from a year earlier.
The High Court has set the first hearing date for July 3.
In a statement to the stock exchange, Times China said it would seek legal measures to “resolutely oppose the petition” and consider “if it is necessary to apply to the High Court for a validation order at a later stage after taking into account the status of the petition and the progress of its restructuring”.
“The company intends to continue to proactively communicate and work with its offshore creditors on the restructuring plan, with the objective of announcing terms to the market as soon as practicable,” the statement said.
It would also negotiate with the petitioner on an amicable resolution as soon as possible, Times China said.
Shanghai-based developer Shimao said it would “vigorously” oppose its winding-up petition, which it said “does not represent the collective interests of the company’s offshore creditors and other stake holders”, and pledged to restructure its offshore debt, it said in a filing to the Hong Kong exchange.
The company said late last month it was seeking to restructure US$11.7 billion worth of offshore debt in its latest efforts to avoid liquidation.
The pressure to liquidate is another challenge for the mainland’s embattled developers. Country Garden Holdings, for example, received a winding-up petition in February for failing to pay back loans worth more than US$200 million. The Foshan, Guangdong-based firm downplayed the possibility of liquidation in a statement last month.
China Evergrande Group, the world’s most indebted developer, was also ordered by a court in Hong Kong to liquidate in late January.
Mainland authorities have been rolling out piecemeal measures to offer developers a financial lifeline by injecting liquidity into the sector to shore up confidence.
But home prices fell for the 10th month in March, suggesting the support measures had failed to improve buyer confidence and boost the market as expected.
Prices of new homes in 70 medium and large mainland cities dropped by 0.3 per cent from a month earlier after a similar 0.4 per cent setback in February, according to data released by the National Bureau of Statistics yesterday.