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Shimao Property, a prominent Chinese developer, is considering including its hotel in Hong Kong as an incentive in its offshore debt restructuring plan. Shimao had initially presented a repayment plan to settle $11.8 billion in offshore debt, but after ten months, the details have yet to be determined. The company failed to make its initial offshore payment last year and had been trying to sell the Sheraton & Four Points by Sheraton Tung Chung Hotel. However, a recent filing revealed a formal agreement to restructure the hotel's loan facilities. The company holds $6.1 billion in unpaid international bonds, ranking it as the sixth-largest Chinese developer in bond issuance.
Earlier this month, Shimao Property announced that it is considering including its hotel in Hong Kong as an additional incentive in its restructuring of offshore debt, rather than selling the property outright. Shimao, which is the first prominent Chinese developer to engage in formal discussions with creditors regarding restructuring terms, had initially presented a repayment plan in August. The plan aimed to settle a combined sum of $11.8 billion in offshore debt within a timeframe ranging from three to eight years. However, after ten months, the specific details of the plan have yet to be fully determined.
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The developer based in Shanghai, which failed to make its initial offshore payment in July last year, had been attempting to sell the Sheraton & Four Points by Sheraton Tung Chung Hotel since March. The hotel, situated near the international airport, was expected to fetch a minimum of $828 million, according to the sales agent JLL.
However, in a recent filing, Shimao announced that in June it had successfully reached a formal agreement to restructure the loan facilities of the hotel. This restructuring arrangement may potentially be included as an additional credit enhancement in the asset package for the ongoing restructuring process.
The company further stated that it, along with an ad hoc bondholder group and an offshore bank committee, is currently working towards resolving discrepancies on different matters within the restructuring proposal.
Refinitiv data indicates that Shimao holds $6.1 billion in unpaid international bonds, making it the sixth-largest Chinese developer in terms of bond issuance.
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