Jinke Properties Group Co. obtained shareholders’ approval to make a restructuring application with a Chinese court, a step toward becoming the largest developer to do so during the country’s property crisis.
Thursday’s vote followed the Shenzhen-listed builder’s board backing a proposal last month to apply. Jinke is seeking the overhaul to help restore profitability, it said in an exchange filing Thursday. The company disclosed last year that it missed payment on a local bond.
A restructuring application could be an leading example for China’s onshore credit market, where debt overhauls have been rare. But such proceedings have proliferated in Hong Kong and elsewhere amid a record wave of dollar-bond defaults. In a sweeping 16-point package rolled out by China last November to support the real estate industry, debt restructurings were encouraged. Early stage efforts usually involves debt claims reporting, asset valuations and negotiations with the help of a court.
Jinke said nearly two months ago that unit of state-owned bad debt manager China Great Wall Asset Management Co. intended to participate in the restructuring as an investor.
The developer, whose contracted-sales ranking nationally has slumped to 62nd from 26th last year, disclosed in May that a Chongqing-based construction firm filed a reorganization petition alleging 27.9 million yuan ($3.8 million) of commercial bills weren’t paid. Meanwhile, offshore creditors in March sought help from mainland officials to supervise Jinke’s offshore bond payments.
