Shimao says it's in talks for property sales to help resolve debt crisis

$SHIMAO GROUP(00813.HK)$ Chinese real estate developer Shimao Group Holdings pushed back Tuesday on reports of default and sales of prime property.

Shimao is one of China's healthier developers. However, the company's Hong Kong-listed and mainland-listed stocks and bonds have plunged in the last few months after warnings of a shortfall in sales. The volatility comes amid broader concerns about the Chinese real estate industry's ability to pay off high amounts of debt.

In a filing on Tuesday, Hong Kong-listed Shimao Group made its first public response to media reports about the sale of its real estate projects.

"Certain media reports have alleged that the Group has not fulfilled its financial obligations under a fund," Shimao said in the filing. The company distanced itself from the unspecified fund, claiming that the developer's subsidiaries were not directly involved with repayment, but were guarantors.

Over the weekend, Chinese financial news site Caixin reported that Shimao put all its properties up for sale, which included a preliminary 10 billion yuan ($1.57 billion) deal with a state-owned company to buy Shimao International Plaza in downtown Shanghai.

That followed a Reuters report Friday that Shimao failed to make full repayment on a trust loan, sending the company into default.