HONG KONG/BEIJING :Two creditors of China’s Guangzhou R&F Properties have sued the property developer to seek a bankruptcy restructuring, notices in an official database showed, deploying a rare court tactic against a mid-sized firm of its kind.
While many developers, including R&F, have faced legal action by creditors for non-repayment, such restructuring requests to Chinese courts are uncommon, as government officials usually step in to mediate, developers and lawyers said.
Many of them, however, face winding-up petitions in Hong Kong and overseas jurisdictions.
Wednesday’s notices showed that Guangdong Xiangyi Trading Co and Guangzhou Guangfeng Concrete Ltd filed the bankruptcy restructuring applications in the Guangzhou Intermediate People’s Court, but gave no further details.
The creditor firms could not be reached for comment.
The dispute was over 20 million yuan ($2.79 million) worth of commercial paper, R&F said in a statement, adding it was not in insolvency and would seek legal measures to “resolutely” oppose the application.
It also said it has not received any relevant court document relating to the application.
R&F, which ranked No.20 in China in 2020 before the sector slipped into a debt crisis the following year, also owned several projects overseas, in places such as Britain and Malaysia before its liquidity problems.
Media, citing company database portals, have reported that the courts have so far ordered the freezing of a dozen assets of the developer.
The developer, which has sought to extend its debts onshore, also completed a scheme offshore last year to exchange its dollar bonds maturing through 2024.
The database on which the notices appeared is formally known as the National Enterprise Bankruptcy Information Disclosure Platform.
($1=7.1588 Chinese yuan)
($1 = 7.1573 Chinese yuan renminbi)