(Yicai Global) Sept. 8 -- Embattled developer Sunac China Holdings said it would defend itself against a liquidation petition filed by a creditor in Hong Kong, describing it as a radical act by an individual, The Paper reported today.

In November, the High Court of the Hong Kong Special Administrative Region will hear a wind-up petition submitted by an investor named Chen Huaijun, according to the court’s website. 

If a firm is forced into liquidation, it stops business and sells all of its assets to repay debts. Any creditor can apply for such liquidation, according to Hong Kong law. If a petition is approved, the court will issue a compulsory winding-up order and require the company to sell assets for the sake of debt repayment and then distribute the remainder of its assets.

Chen is the general manager of Anhui province-based Jindadi Property Development, according to The Paper. Sunac noted that the debt owed to Chen is modest and said his liquidation petition will not have any major influence on the company’s operation or its debt restructuring plan. 

Sunac also said it has been actively communicating with the advisor of the committee of creditors about the preliminary plan for the restructuring, adding that the majority of creditors have expressed their support. The developer said it would make public its reorganization plan this year. 

Sunac defaulted in May, saying it was unable to pay interest of USD104 million due on four US dollar-denominated bonds.

At the end of June last year, Sunac’s debts totaled CNY997.1 billion (USD143.3 billion) and it had a liability-to-assets ratio of 82.72 percent. The Beijing-based developer has not yet issued its annual earnings report for 2021. 

During the first eight months of this year, Sunac had contract sales of CNY134.6 billion (USD19.6 billion), an annual drop of 68 percent. 

Editor: Tom Litting