Chinese developers’ troubles continue as Dexin gets liquidated
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The liquidation order shows lingering distress despite fresh attempts from the Chinese government to help the industry recover.
PHOTO: AFP
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HONG KONG – The list of Chinese developers facing court-ordered liquidation in Hong Kong is getting longer, after a builder of homes in an affluent eastern coastal region was ordered to wind up.
Dexin China Holdings received the order on June 11, three months after a petition was filed by China Construction Bank (Asia), and 1½ years after it defaulted.
A new restructuring plan was approved in 2023, though the developer, which built residential as well as commercial buildings, was not able to keep up with that either.
Hong Kong has served as a gateway for investors to access mainland issuers’ high-yield offshore bonds. But that has also made it an epicentre of the years-long downturn in China’s property sector, which continues to dog the country’s economy
The liquidation order shows lingering distress despite fresh attempts from the Chinese government to help the industry recover.
Dexin joins a group including Jiayuan International Group, Yango Group’s offshore unit, Sinic Holdings Group and China Evergrande Group that have received such orders from courts in Hong Kong in the past couple of years.
This is not the last one, either. A number of major developers, including Country Garden Holdings and Shimao Group Holdings, are set for hearings in the coming months to persuade judges that they are moving forward with their own debt-overhaul plans.
Dexin, a Zhejiang-based developer, concentrated on developing homes and commercial buildings in China’s relatively wealthy Yangtze River Delta region. It had total liabilities of 64.4 billion yuan (S$12.3 billion) as at the end of 2023, according to its latest annual report.
Dexin defaulted in December 2022 with non-payment of 9.95 per cent senior notes due in 2022 in principal amount of US$350 million (S$473 million).
That is a “really long time ago”, China Construction Bank’s legal representative said in court on June 11. The developer’s lawyer tried to argue that a small number of creditors opposed the petition and there had been attempts to negotiate.
High Court Judge Linda Chan took less than 20 minutes to issue the decision. She plans to hand down a judgment within a week. BLOOMBERG
