China’s ailing real estate market continues to impact global financial institutions with Frankfurt-based Deutsche Bank reportedly preparing a liquidation lawsuit against a property developer from the country.
Deutsche Bank is readying a liquidation lawsuit in Hong Kong against Shanghai-based developer Shimao Group, according to a «Reuters» report citing unnamed sources.
The German lender is looking to file the petition this month after it found Shimao’s debt restructuring terms unacceptable. The Chinese developer has yet to reach an agreement on the new terms with creditors not willing to accept its proposed 50 percent discount on investments. The offshore debt restructuring terms were presented to creditors in December 2023 after 18 months of negotiation.
Missed Payment
Shimao, which was previously a top 20 developer in China, first missed an interest and principal payment for a $1 billion offshore bond in July 2022. Thereafter, it was deemed to have defaulted on its entire $11.7 billion worth of offshore debt.
According to the report, Deutsche Bank's credit exposure to Shimao is linked to private dollar bonds though it could not determine the exact amount.
