China South City (1668) has been ordered to liquidate by the Hong Kong High Court, marking it as the largest mainland property developer by assets to be dissolved following China Evergrande Group (3333).
Shares of China South City fell 2 percent to HK$0.107 before trading was suspended in the morning session, with the company’s market capitalization standing at HK$1.224 billion prior to the halt.
After months of negotiations, China South City failed to secure enough creditor support for its restructuring plan.
According to the developer’s annual report, its total liabilities stood at about HK$60.9 billion as of the end of last year.
An independent audit by Ernst & Young showed that China South City’s current liabilities exceeded its current assets by HK$2.85 billion at year-end. Its short-term interest-bearing debt, including priority notes and bank borrowings, amounted to HK$18.24 billion, while cash and cash equivalents were only HK$41 million.
Meanwhile, defaulted borrowings surged to HK$15.74 billion as the company failed to meet principal or interest payments on time.
On January 27 this year, Citicorp International filed a liquidation petition against China South City.
Since the mainland property crisis began in 2021, the Hong Kong High Court has ordered the winding up of at least six Chinese property developers, including Evergrande, according to Bloomberg.
STAFF REPORTER
