[Epoch Times December 20, 2021](Epoch Times reporter Li Jing comprehensive report) The Chinese real estate company Shimao Group recently sold its equity in Hong Kong’s “Victoria Harbour” project in order to withdraw cash, with an estimated loss of approximately HK$770 million. Shimao Group is one of China’s largest real estate companies with bond issuance, and has been making continuous moves in asset disposal recently.
Shimao Group announced on December 17 that an indirect wholly-owned subsidiary of Shimao Group intends to sell sales shares and sales loans of the target company to Qiyi, GAL and Shaoxiang for a total consideration of approximately HK$2.086 billion.
Among them, the target companies include Jiayao Development Co., Ltd., Delun Co., Ltd. and Grand Victoria Finance Company Limited. Shimao Group holds 22.5% of each of the aforementioned three companies and corresponding shareholder loans. At the same time, the target company is a special purpose company established for the purpose of owning, developing, investing, marketing and managing a project located in Southwest Kowloon, Hong Kong. The project is called “Victoria Harbour”.
Shimao Group stated that it expects to confirm a loss of approximately HK$770 million on the sale as of December 31, 2021. The announcement shows that the net proceeds from the sale are expected to be used for business development, debt repayment and general corporate purposes.
According to the “Economic Observer” report, in early December, Shimao Group confirmed to the outside world that its headquarters building in Lujiazui, Shanghai, Shimao Tower, had been mortgaged for financing. In addition to mortgage assets, Shimao Group is also processing its assets. Shimao’s management said at an investor meeting held in early November that it was negotiating some high-quality core assets that had previously been reluctant to sell.
On the day when Shimao Group announced the sale of its interest in the Hong Kong Victoria Harbour Exchange project, Fitch downgraded Shimao Group’s issuer default rating from “BBB-” to “BB”, and upgraded its senior unsecured rating and outstanding senior unsecured rating The bill was lowered from “BBB-” to “BB”.
Prior to this, Moody’s long-term rating of Shimao Group has been rubbish Ba1 and has been placed on the negative watch list. Last month, Standard & Poor’s downgraded the company’s rating to junk.
Shimao Group is the 13th largest real estate company in China and one of the real estate companies with the largest bond issuance.
In recent years, Shimao Group’s total liabilities have been steadily increasing. According to data from the 2021 semi-annual report, Shimao Group’s total liabilities are 463.63 billion yuan (RMB, the same below), which is a net increase of approximately 108.88 billion yuan in one and a half years compared to 354.75 billion yuan at the end of 2019. The group’s total borrowings also increased by 13.3% from RMB 145.14 billion at the end of 2020 to approximately RMB 164.51 billion in mid-2021.
Editor in charge: Li Qiong#
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