City Developments limits exposure to Sincere Property after bankruptcy claim

The Group claimed its exposure only amounted to $126m.

City Developments Limited (CDL) has assured that it has “ring-fenced” its financial exposure to its investments in Sincere Property Group after the latter faced a bankruptcy claim.

The Beijing Yi He Mercury Investment Co. Ltd. has filed a bankruptcy claim before the People’s Republic of China Chongqing No. 5 Intermediate People’s Court against the Chongqing-based developer, Sincere Property.

CDL, in a statement signed by Company Secretary Enid Ling Peek Fong, noted that Sincere Property will be announcing the bankruptcy claim on the Shanghai Stock Exchange.

The Group “will not support the continuing financial obligations of Sincere Property,” the statement also read. “Despite the bankruptcy proceedings, the Group will continue to strenuously protect its position and limit further exposure.”

Based on CDL performance for the year ended December 2020, a decision was made to impair some $1.78b, effectively impairing 93% of its total investment in Sincere Property.

In light of this, the Group's remaining exposure amounts to only $126m, as of 31 December 2020.