(Yicai Global) Nov. 8 -- Shares of Logan Group dived after its creditors asked two courts to order the debt-laden Chinese real estate developer to close down.

Shenzhen-based Logan's stock price [HK: 3380] dropped as much as 19.2 percent to HKD0.40 (US 5 cents) intraday as of 1.33 p.m. The shares are more than 90 percent down this year.

Citicorp International filed a winding-up petition against the property firm with the Grand Court of the Cayman Islands and the High Court of the Hong Kong Special Administrative Region on behalf of minority holders of senior notes with an interest rate of 5.75 percent due 2025, the indebted company said in a statement yesterday. The notes are valued at USD300 million.

The petition will likely cause Logan’s creditors to claim for accelerated repayment but it will not impact its business in China, the property firm said. Logan and its financial consultants have been negotiating with creditors about debt management plans since late August, and many creditors have shown their willingness to cooperate, it added.

However, the petition is likely to harm the value of such notes and the interests of other stakeholders so the company will resort to legal measures to fight it and do whatever is necessary to protect its rights and interests, per the announcement.

Overseas arms of more than 10 Chinese real estate developers including Fantasia Holdings Group and China Evergrande Group have received winding-up petitions this year, but few of them have ended up shutting down, according to Yicai Global’s incomplete statistics.

Companies that default on overseas debts trigger conditions for such requests, and it is highly probable that overseas courts will rule that these companies should be wound up, Bai Wenxi, chief economist at IPG China, said in a previous interview with Yicai Global.

But Chinese courts do not necessarily support the eventual overseas ruling because these companies’ most efficient assets and businesses are in China so creditors usually file the petitions to create pressure on defaulting companies, urging them to make compromises that favor them, Bai explained.

Logan has nine dollar-denominated bonds with a balance of USD2.9 billion, and some USD850 million of that will be due within one year, according to data platform Qyyjt.

Editor: Emmi Laine, Xiao Yi