SHANGHAI (Reuters) – Chinese developer Shimao Group Holdings has told trust firms that it plans to make payments on its publicly issued bonds and interest that are due in the fourth quarter, financial intelligence provider REDD reported on Friday.
Shimao also plans to pay migrant workers salaries before the Chinese New Year, REDD said, citing unidentified sources.
Chinese developers have been under enormous strain this year as regulators have sought to reduce leverage in the heavily indebted sector with rules capping their ability to issue new debt.
Shimao saw sharp falls in its shares and debt earlier this month, triggered by worries over an asset sale and cancelled apartment deals.
The developer has asked for trust firms for short-term extensions of loans coming due, according to REDD.
It has asked trust firms to be patient and said it expects 10 billion yuan ($1.6 billion) worth of cash to be released from presale escrow accounts from Jan. 1, REDD reported.
Shimao’s biggest creditor, China Merchants Bank, plans to increase its loan exposure to Shimao – currently at 30 billion yuan – and plans to rally financial support for Shimao from other lenders, the report said.
($1 = 6.3686 Chinese yuan)
(Reporting by SHANGHAI NEWSROOM; Editing by Edwina Gibbs)
