An elderly couple walk past a sign in front of Shimao Tower on Saturday, January 8, 2022, owned by Shimao Group Holdings Ltd. was developed in Shanghai, China.
Qilai Shen | Bloomberg | Getty Images
BEIJING – Chinese real estate developer Shimao Group Holdings on Tuesday rejected reports of defaults and sales of prime real estate.
Shimao is one of China's healthier developers. However, the company's Hong Kong and mainland-listed stocks and bonds have plummeted in recent months following warnings of lower sales. The volatility is due to general concerns about the ability of the Chinese real estate industry to pay off large debts.
In a filing on Tuesday, the Hong Kong-listed Shimao Group made its first public response to media reports on the sale of its real estate projects.
"Certain media reports have alleged that the group has failed to meet its financial obligations from a fund," Shimao said in the filing. The company distanced itself from the unspecified fund, claiming the developer's subsidiaries were not directly involved in the repayment but were guarantors.
Over the weekend, Chinese financial news website Caixin reported that Shimao had put all of its properties up for sale, including a preliminary 10 billion yuan ($ 1.57 billion) deal with a state-owned company to purchase Shimao International Plaza in downtown Shanghai .
That was followed by a Reuters report on Friday that Shimao was unable to repay a trust loan in full, causing the company to default.
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"The company has not reached a preliminary agreement to divest Shanghai Shimao International Plaza," said Shimao. The company also said it was in talks with potential buyers and could sell some properties "to reduce the group's debt".
"As of the date of this announcement, the company has no outstanding asset-backed securities that are due and payable," the filing states.
Shimao shares traded slightly higher on Tuesday morning, after rising just over 19% on Monday.