A lender to Shimao Group Holdings is negotiating with private credit investors to offload a $1.3bn loan tied to a luxury apartment project central to the restructuring of the defaulted Chinese developer, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter as revealing that United Overseas Bank (UOB), based in Singapore, has approached potential investors in recent weeks regarding the HKD10bn loan, which was taken by Shimao in 2022. The loan, backed by the Beacon Peak complex in Kowloon Tong, Hong Kong, is due for repayment by 30 September, 2025.
The developer, in the midst of asset sales to settle debts, recently listed 13 units of the Beacon Peak complex for sale. As of 18 January, three units had sold, fetching prices between HKD28m and HKD37m (approximately $3.6m to $4.8m). However, these sales fall far short of the loan principal, highlighting Shimao’s difficulty in quickly generating cash in Hong Kong’s sluggish property market.
The involvement of private credit investors could complicate the company’s ongoing debt restructuring efforts, particularly since these investors often seek to seize assets when borrowers default. Beacon Peak is a key asset in Shimao’s restructuring, with creditors eyeing it for potential repayment.
Shimao did not immediately respond to a request for comment, and UOB also did not reply to inquiries.
Proceeds from the sale of the units will first be used to repay the loan’s principal, interest, accrued fees, and related project costs, according to sources familiar with the transaction.
