(Yicai Global) April 7 -- Sinic Holdings will become the first real estate developer in the Chinese mainland to be removed from the stock exchange after it defaulted on debt and failed to publish an annual earnings report.

Shares of Sinic failed to resume trading before March 19, so it will be delisted on April 13, according to the relevant rules, the Hong Kong Stock Exchange announced yesterday. The Shanghai-based builder went public in November 2019.

Sinic failed to pay CNY38.7 million (USD5.6 million) interest on two domestic financing arrangements on Sept. 18, leading to its stock [HKG: 2103] being suspended on Sept. 20 after it tumbled 87 percent.

The firm subsequently said it had no funds to repay the principal and interest of a USD250 million debt due on Oct. 18 and did not have any specific plan for remedial measures. It has not released any earnings report in the past 18 months.

The stocks of many other real estate companies based in the Chinese mainland are also halted from trading. About 10 of them, including Shimao Group and Sunac China, are expected to face delisting in the upcoming six months.

Sinic’s market capitalization was CNY1.8 billion (USD262 million) on its last day of trading, down over 81 percent from its debut. As of June 2021, its total liabilities had reached CNY91.8 billion (USD13.4 billion).

If a company that suspended trading in Hong Kong wants to resume trading, it needs to publish its financial results in accordance with HKEX guidelines, prove it has sufficient business operations and assets of considerable value to support its operations, and provide all relevant information so that shareholders and investors can assess its position.

Sinic was founded in Nanchang, Jiangxi province, in 2010. It is controlled by tycoon Zhang Yuanlin, who moved its headquarters to Shanghai in 2017.

Editor: Futura Costaglione