Sunac China shares and bonds plunged on Friday after a liquidation petition was filed against the developer, reigniting investor concerns about the debt crisis in the property sector despite Beijing's revival measures.
The petition, filed by a unit of state-owned asset manager China Cinda Asset Management, also deepened worries over Sunac's business recovery and repayment ability despite an offshore debt restructuring it completed in 2023.
A hearing is scheduled for March 19, the Hong Kong judiciary's website showed late on Thursday.
Many mainland developers, including China Evergrande and Country Garden, have faced or are currently facing liquidation cases in Hong Kong since the property sector was hit by a liquidity crunch in 2021.
But petitions have rarely been filed by state-owned companies and China Cinda's was made despite Beijing's pledges to stabilise the struggling property sector and the stock market. Calls to the petitioner, China Cinda (HK) Asset Management, went unanswered on Friday.
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"I'm not surprised by the petition," said Alvin Cheung, associate director of Prudential Brokerage Ltd in Hong Kong. "Chinese developers are not making much money, while they have to keep repaying a lot of debt."
Sunac, which reported total borrowings of 277.4 billion yuan ($37.83 billion) as of the end of June in its interim financial results, is also working to restructure $2.1 billion of yuan-denominated bonds.
Chinese property stocks were down on Friday, with Cheung pointing to growing concerns about further defaults.
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