The problem has been exacerbated since last fall, when Evergrande China’s second-largest real estate firm has begun to raise cash to pay off its debts.
It is China’s most indebted real estate firm with about $300 billion in debt. In December, Fitch Ratings declared Evergrande insolvent.
For Shimao, Moody’s estimates earlier this year showed that the company’s debt maturing this year was quite large.
These include $1.7 billion in international bonds, 8.9 billion yuan ($1.4 billion) of domestically issued bonds, and large amounts of foreign bank loans.
Shimao was founded by Hui Wing Mau in 2001, specializing in building large-scale housing and hotel projects in China. They own shanghai Shimao International Plaza – one of the tallest buildings in central Shanghai.
In March, the company estimated a 62 percent drop in net profit for 2021 compared to the same period a year earlier, mainly due to “harsh” market conditions.
It also postponed the release of its 2021 financial statements, citing Shanghai’s blockade.
“Due to major macro changes in the real estate industry in China since the end of 2021 and the impact of Covid-19, the Group has recorded a significant drop in revenue in recent months.
This is expected to continue in the short term until china’s real estate industry stabilizes again,” Shimao said in a statement.
The company added that it was trying to reach an “agreement” with other creditors. If they fail to agree, the creditors could force Shimao to speed up the repayment.
