Suning Appliance Sued by Creditors for $255 Million
(Bloomberg) -- China Construction Bank Corp. on behalf of creditors sued Suning Appliance Group Co Ltd. to recoup about $255 million lost on debt.
The group, which used to own retail giant Suning.com Co., and its owner, father-and-son pair Zhang Jindong and Zhang Kangyang, were listed as defendants in an Aug. 2 claim filed in the Hong Kong High Court.
The suit is being brought by China Construction Bank (Asia) Corp., which is acting on behalf of creditors. Suning Group declined to comment.
Suning Appliance in July allegedly defaulted on a $165 million facility agreement and a $85 million secured note due 2021, according to the filing. The default came after the company revealed its financial difficulty in a May report.
Billionaire Zhang Jindong, who founded Suning, resigned as chairman last month after a $1.36 billion state-backed bailout. Allies of Alibaba Group Holding Ltd. have now taken the helm at Suning.com. Huang Mingduan, founder and chairman of Sun Art Retail Group Ltd., the Alibaba-controlled hypermarket chain, was named Suning.com chairman last week.
Suning Appliance Group and its subsidiaries have about 29.2 billion yuan ($4.5 billion) in outstanding local and offshore bonds, 3.9 billion yuan of which come due this year.
Suning.com to Be Led By Alibaba Ally After $1.4 Billion Bailout
The son, also known as Steven Zhang, remains the head of Suning’s international operations, which includes the Italian football club Inter Milan, though it’s unclear if his position will change amid restructuring after the bailout.
Zhang Jindong is among several high-profile billionaires toppled by Beijing’s crackdown on a reckless debt-fueled expansion in its corporate sector. Other conglomerates that have been reined in or forced to unwind investments include HNA Group Co. and Dalian Wanda Group Co., both of which also grew to dangerous size after a flurry of overseas acquisitions.
Zhang’s friend, China Evergrande Group Chairman Hui Ka Yan, for whom he waived his rights to a 20 billion yuan payment from the indebted property developer, is also under mounting pressure.
The plaintiffs are also demanding $2.58 million in defaulted interest as well as additional interest on the 13% facility until a judgment or repayment is made.
©2021 Bloomberg L.P.