On July 8, 2021, City Developments (CDL) announced that a bankruptcy claim was filed by Beijing Yi He Mercury Investment Co., a Sincere Property joint-venture. CDL owns 51% of Sincere Property, in which it had invested $1.9 billion, and impaired $1.78 billion. In its July 8 announcement, CDL reiterated that it has ring-fenced its current financial exposure to its investment in Sincere Property and it will not support the continuing financial obligations of Sincere Property. “Despite the bankruptcy proceedings, the Group will continue to strenuously protect its position and limit further exposure,” the statement says.
An update by Insights Direct DBS points out that CDL had previously made a commitment to not inject further funds into Sincere until the unit returned to health. “While the verdict now is on the court, we believe there should be no immediate impact on the numbers given City Dev’s impairment on its investment,” the DBS unit says.
