Property developer China South City creditors to claim $1.4bn in damages


In response to the China South City lawsuit, summons have been issued against Shenzhen SEZ Construction and Development Group (SZCDG), a state-owned shareholder of the developer, a filing to Hong Kong High Court dated June 3 shows.

The creditors’ group is demanding at least $1.4bn as damages, the filing showed. The group, represented by Citicorp and law firm Mayer Brown, used a keepwell provision to file the case, it showed.

SZCDG and the creditors’ solicitor Mayer Brown did not immediately respond to Reuters request for comment.

The filing said that SZCDG entered into a keepwell deed with creditors on August 9, 2022, to assist China South City in meeting repayment obligations of the developer under a series of senior bonds it issued.

China South City missed a principal payment of $11.25m on a dollar bond due on February 9, 2024. The issuer later failed to make payments in relation to another two tranches of notes in April, the filing showed.

The state shareholder, the filing said, failed to perform its obligations in offering credit support. The group of creditors, therefore, are pushing for the SZCDG to repay the outstanding principals, accrued interest and other fees, it added.

SZCDG is the biggest shareholder of China South City, holding 29%, the developer’s 2023 annual report shows.

Focused on construction and operation of infrastructure and industrial parks, SZCDG is owned by the Shenzhen government, its official website shows.

A group of bondholders proposed making use of the Hong Kong law governed keepwell deed to sue the state shareholder for dues earlier this year, Reuters reported in February.

Reuters





Source link

Leave a Reply

Your email address will not be published. Required fields are marked *