Chinese builder Redsun Properties faces winding-up threat in Hong Kong as debt crisis goes from bad to worse
- Chinese developer Redsun Properties is facing a winding-up petition in Hong Kong as creditors demand repayment of defaulted dollar bonds
- Chairman and major shareholder Zeng Huansha’s personal investment vehicle also faces similar litigation after missing a bond repayment
The Bank of New York Mellon (London branch) has filed a winding-up petition against the firm for failing to repay at least US$228.5 million, the company said in a Hong Kong stock exchange filing on Friday. The debt is related to a US$200 million two-year junk bond due in September 2023 plus unpaid interest.
The petition was filed on February 14 in Hong Kong, according to the filing. The hearing date was not disclosed. Redsun said it is seeking legal advice on the matter. The US bank acts as the trustee of the bond, according to the bond offering document published in 2021.
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The litigation highlights the swift downfall of the developer based in Nanjing in eastern Jiangsu province, which only listed in Hong Kong less than six years ago. It also shows how some foreign creditors have lost patience with many Chinese builders as home sales have slumped after a liquidity crunch triggered by Beijing’s “three red lines” policy, and were later compounded by the Covid-19 pandemic.
The same Hong Kong court last month granted a winding-up order against China Evergrande Group after it failed to reorganise about US$20 billion of offshore debts. The Evergrande case has been billed as the biggest corporate collapse of a Hong Kong-listed entity, based on its US$337 billion of total liabilities.