Chongqing Sincere Yuanchuang Industrial Co, a cash-strapped Chinese developer owned by Singapore’s richest property family, may undergo a court-led restructuring after a bankruptcy application was filed against it, according to people familiar with the matter.
Sincere Property Holdings, the second-largest shareholder of Chongqing Sincere, is preparing to work with stakeholders and creditors on a restructuring of the builder, said the people, asking not to be identified discussing private information. Singapore’s City Developments, owned by the billionaire Kwek family, has a 51% stake in the developer.
A Beijing-based creditor of Chongqing Sincere submitted a bankruptcy petition against the company to the No. 5 Intermediate People’s Court in Chongqing, according to a July 5 filing posted on the National Enterprise Bankruptcy Information Disclosure Platform. If the local court accepts the application, a formal process would be triggered leading to either restructuring or liquidation, or a settlement between creditors and the company.
The case is still at an application stage, Chongqing Sincere said in a written reply to Bloomberg, adding it doesn’t affect business in its subsidiary property projects. Sincere Property Holdings said it respects credit holders’ wishes and its other businesses remain normal. Representatives for CDL weren’t immediately able to comment.
A restructuring would close a painful chapter for CDL, which posted a record annual loss last year after writing off almost all of its $1.9 billion investment in Chongqing Sincere. CDL Chief Executive Officer Sherman Kwek once hailed the 2020 deal as “game-changing” before vowing not to inject further funds until the unit returned to health.
