Chinese developer Shimao Group’s stocks and bonds plunge after loan default

A man walks past a wall bearing the Shimao Group logo, with residential buildings and the Pudong financial district in the background, in Shanghai, China, January 1, 2013. REUTERS / Stringer

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HONG KONG / SHANGHAI, Jan. 7 (Reuters) – Shares of Chinese developer Shimao Group Holdings collapsed on Friday and trading in some bonds of its key unit was halted after the company defaulted on a loan payment fiduciary, highlighting the continued tension in the Chinese real estate sector.

Hong Kong shares of Shimao (0813.HK) fell more than 18% after trading opened on Friday, while three Shanghai exchange-traded bonds issued by its Shanghai Shimao Co unit (600823.SS) fell. of more than 20%, triggering trading breaks on this the Shanghai Stock Exchange said it was “abnormal fluctuations”.

Three other Shanghai Shimao bonds fell between 13% and 14%, according to stock exchange data. All six bonds were last listed at distressed levels of 40 to 60% of their face value.

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The falls come after a trust company, China Credit Trust Co, said Thursday that the Shimao Group defaulted on a loan after missing a payment of 645 million yuan ($ 101.10 million). Read more

Another unit of Shimao, Shanghai Shimao Construction, said on Friday that it is in talks with China Credit Trust to resolve the overdue payment, and that the missed payment will not speed up payment requests in the market. open bond.

($ 1 = 6.3797 yuan)

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Reporting by Clare Jim in Hong Kong and Andrew Galbraith in Shanghai; Editing by Christian Schmollinger and Edwina Gibbs

Our Standards: Thomson Reuters Trust Principles.


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