China Foreign Economy and Trade Trust Co. Ltd., a subsidiary of Sinochem Group, has filed a lawsuit for the liquidation of Shanghai-based real estate developer Glorious Property Holdings Ltd. (00845.HK).
The plaintiff filed the application with the High Court of Hong Kong on Monday. A hearing has been scheduled for Oct. 14.
In a filing with the stock exchange on Tuesday, Glorious Property said it has repaid the 50 million yuan (US$8.05 million) of loan guarantee, related interests and charges the plaintiff provided to the company’s subsidiaries.
It said it foresees no material impact from the litigation on its business and operations.
The company sold US$300 million worth of bonds with a coupon rate of 13 percent that will be due in October.
It said in April that US$19.5 million worth of interests on the debt had already been paid.
The company has 22.3 billion yuan of liabilities that will be due in two years’ time.
Standard and Poor’s earlier released a report warning against the property developer’s poor liquidity. It lowered its long-term credit rating on the company to “Ca”, just a notch above the grade that the rating agency gives to defaulting companies.
In October 2013, Zhong Zhirong, the largest shareholder and former chairman of Glorious Property, offered to privatize the company, but the proposal was rejected by minority shareholders in January last year.
In February this year, Zhong planned to propose another privatization scheme, but the move has yet to proceed following reports that a new investor, Wang Ping, was under police investigation.
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