Developer China South City ordered to liquidate by Hong Kong court
Liquidation order shows how China's years-long property crisis continues to shake one-time giants of the real estate industry.
HONG KONG – Developer China South City Holdings was ordered to liquidate by Hong Kong's High Court, making it the biggest Chinese builder by assets to be wound up since China Evergrande Group.
The ruling from Judge Linda Chan came after China South City failed to win enough support from creditors for its restructuring proposal, following months of talks.
The liquidation order shows how China's years-long property crisis continues to shake one-time giants of the real estate industry. Despite government efforts to prop up the ailing sector, home sales are still weak, making any near-term recovery unlikely. Even UBS Group, which had been among the few firms predicting a recovery, is now expecting a delay unless Beijing introduces additional stimulus measures.
Hong Kong's courts have issued at least six wind-up orders for Chinese developers since the crisis began in 2021, including one for Evergrande, whose liquidation was one of the most complicated given its asset size and the number of stakeholders.
China South City had been at odds with creditors over several issues. During a hearing in May, creditors said they wanted Shenzhen SEZ Construction and Development Group, China South City's biggest shareholder, to play a larger role in the debt talks. They were specifically seeking access to the Shenzhen SEZ Construction's chairman, Li Wenxiong, who serves as a co-chairman of China South City.
China South City's ownership structure is similar to that of China Vanke, a major Chinese developer, which received state support in January, led by local authorities in the company's hometown of Shenzhen.
China South City had total liabilities of about HK$60.9 billion (S$10 billion) as of Dec. 31, 2024, according to its annual report.
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The winding-up petition against China South City was filed by Citicorp International, which is the trustee of the developer's dollar bonds. BLOOMBERG
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