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Shimao hires firms to conduct independent probes amid restructuring push

Stock Markets Oct 03, 2022 07:10AM ET
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© Reuters. FILE PHOTO: People walk past the logo of property developer Shimao Group near Shimao Tower in Shanghai, China January 13, 2022. REUTERS/Aly Song/File Photo

(Reuters) - Shimao Group said on Monday it appointed two firms to conduct independent investigations into issues raised by its previous auditor and its internal control systems, as the developer looks to meet regulatory conditions to resume trading.

The Shanghai-based company also reiterated its commitment to restructure its offshore debt and said it had entered into a HK$10.30 billion ($1.31 billion) loan deal in early-September to fund ongoing construction of a project. [nHKS7d9W3Q ]

The appointments come after Shimao's shares were suspended from trading on April 1 as it failed to publish its 2021 financial results before a regulatory deadline amid a broader crisis in China's property sector.

On Monday, it announced that it had roped in RSM Corporate Advisory (Hong Kong) to look into issues raised by previous auditor PricewaterhouseCoopers (PwC). PwC had requested information related to certain trust loan arrangements involving the firm's joint ventures and associated companies.

The company also hired Zhonghui Anda Risk Services to conduct a review of the group's internal control systems.

Amid a restructuring push, Shimao added that dialogues with various groups of creditors were ongoing and it was communicating regularly with creditors on conducting necessary due diligence of the group's core business.

In August, sources said Shimao had proposed a two-class restructuring plan to offshore creditors to repay $11.8 billion over a period of three to eight years.

($1 = 7.8499 Hong Kong dollars)

Shimao hires firms to conduct independent probes amid restructuring push
 

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