Times China faces winding-up petition filed by Hang Seng Bank in a Hong Kong court

Times China faces winding-up petition filed by Hang Seng Bank in a Hong Kong court

Times China faces winding-up petition filed by Hang Seng Bank in a Hong Kong court

Hong Kong’s Hang Seng Bank has filed a winding-up petition against debt-laden developer Times China Holdings for financial obligations amounting US$266 million, sending share prices of the defaulted company plummeting.
The winding-up petition was filed by Hang Seng Bank, HSBC’s subsidiary, in Hong Kong’s High Court. It comes on the heels of a liquidation suit brought last week by China Construction Bank, the country’s second-largest lender, against another troubled property developer, Shimao Group Holdings, in connection with financial obligations amounting to around HK$1.58 billion (US$201.8 million).

Times China’s shares fell 49 per cent following the announcement. The petition emerges after the company reported poor sales with China’s housing market continuing its downward spiral despite policy measures aimed at boosting the sector.

Founded in 1999, the Guangdong-based Times China reported its contracted sales for the three months ended March 31, 2024 fell 72 per cent to 1.53 billion yuan, from a year ago.

The High Court has set the first hearing date on July 3.

A light show organised to celebrate Times China’s 20th anniversary. Photo: Weibo

Time China said it will seek legal measures to “resolutely oppose the petition”, and will 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 offshore restructuring”, in a statement to the stock exchange.

“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,” according to the statement. It will also negotiate with the petitioner on an amicable resolution as soon as possible, Times China said.

Embattled Shimao faces rare winding-up petition from Chinese state-owned bank

The Shanghai-based developer Shimao said it will “vigorously” oppose the winding-up petition, which it said “does not represent 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 stock exchange.

Last month, Shimao said late last month that 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 China’s embattled property developers. Country Garden, for example, received a winding-up petition in February for failing to pay back loans worth over US$200 million. The Foshan, Guangdong-based developer downplayed the possibility of liquidation in a statement last month.

Evergrande Group, the world’s most indebted developer, was ordered by a court in Hong Kong to liquidate in late January.

Chinese authorities have been rolling out piecemeal measures to offer property developers a financial lifeline by injecting liquidity into the sector in an attempt to shore up confidence.

But home prices fell for the 10th month in March, suggesting the supporting measures have failed to lift buyer confidence and boost the market as expected.

Prices of new homes in 70 medium and large cities fell 0.3 per cent from a month earlier, following a similar 0.4 per cent setback in February, according to data released by the statistics bureau. It fell at an annual rate of 2.7 per cent in March, versus 1.9 per cent of the annual rate in February.

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