Chinese property developer Shimao Group stated on Friday (Jan 28) it will promote a hotel in Shanghai to state-owned Shanghai Land Group for 4.5 billion yuan (US$707.83 million), because it seeks to cut back its debt amid a disaster within the nation’s property sector.
The deal is a part of the Chinese authorities’s push to purchase property from cash-strapped personal builders, as Beijing steps up efforts to stabilise and tighten management over a beleaguered sector that accounts for 1 / 4 of its economic system.
Shimao, which defaulted on a belief mortgage earlier this month, stated it is going to promote an entity whose principal asset is the Hyatt on the Bund hotel to the Shanghai Land Group.
The developer in 2022 has US$1.7 billion maturities offshore and eight.9 billion yuan onshore, in accordance to Moody’s.
The transfer comes on the identical day Agile Group, one other embattled Chinese property firm, offered stakes in a number of models price almost 2 billion yuan to state-owned China Overseas Land & Investment and China Conch Venture. Regulatory curbs on borrowing have pushed China’s property corporations right into a debt disaster, with sector bellwether China Evergrande grappling with US$300 billion in liabilities.