Indebted Chinese developer Zhenro asks to delay restructuring amid ‘strained’ conditions, Ping An unit’s lawsuit threat
- Shanghai-based developer, facing 61.86 billion yuan (US$8.5 billion) in debts, says it needs more time to consider restructuring plan
- A unit of Ping An Insurance Group says it is suing Zhenro in connection with a property-linked trust product worth US$106 million
Defaulted Chinese developer Zhenro Properties Group is seeking to postpone a restructuring plan as its liquidity woes continue amid slumping sales, slow asset disposal and the threat of a lawsuit from Ping An Insurance Group over a property-linked trust.
Zhenro plans to delay the implementation of a restructuring agreement and is seeking to vacate a May 2 Hong Kong court hearing related to it, the company said in a filing with the Hong Kong stock exchange late on Thursday.
The Shanghai-headquartered developer said it needs more time to consider the agreement in light of a “strained operating and funding environment” due to slumping contracted sales and slower asset disposal in the country’s property sector.
“The company requires more time to consider whether the commercial terms as currently presented in the [agreement] remain the appropriate solution to the group’s offshore indebtedness in order to secure a sustainable and viable business for the company in the long-term,” it said.
Zhenro’s move came on the same day that a unit of Ping An Insurance Group, China’s largest insurer by market value, delayed repayment for a property-linked trust product worth 772.4 million yuan (US$106 million). Ping An cited the country’s property woes for the delay in payment and said it would be suing Zhenro, in which it invested.
Zhenro did not respond to a request for comment.