14 hours ago
Hong Kong Court Orders China South City's Liquidation
China South City Holdings Ltd, the largest Chinese property developer by assets to face court-ordered liquidation since China Evergrande Group, has been ordered to wind up by Hong Kong's High Court, dealing another blow to already fragile investor confidence in the country's real estate sector.
Bloomberg reported that the ruling from Judge Linda Chan came after the Shenzhen-based company failed to secure sufficient creditor backing for its restructuring plan. The winding-up petition was filed by Citicorp International Ltd, acting as trustee for the firm's dollar bonds, raising fresh concerns about recovery prospects for offshore creditors in China's ongoing property turmoil.
China South City, burdened with HK$60.9 billion in liabilities as of Dec 31, 2024, had been in protracted talks with creditors. Disagreements centred on calls for greater participation from its largest shareholder, state-owned Shenzhen SEZ Construction and Development Group Co, and direct engagement with its chairman, Li Wenxiong.
The liquidation adds to a growing list of high-profile defaults and court orders since the sector's downturn began in 2021. At least six Chinese developers have been ordered to wind up in Hong Kong, underscoring the limited success of Beijing's measures to stabilise the market. Even UBS Group AG, previously among the most optimistic forecasters, has now pushed back its recovery timeline unless significant new stimulus is introduced.
Market watchers say the collapse could further weigh on Chinese high-yield dollar bonds, already trading at distressed levels, and heighten scrutiny of state-linked developers previously seen as safer bets.
