HONG KONG, March 27 (Reuters) - A group of major

bondholders of defaulted Chinese developer Shimao Group ( SIOPF )

said on Wednesday it "firmly opposes" the firm's

proposal to revamp $11.5 billion of offshore debt, clouding its

prospects amid a deepening crisis in the property sector.

"The ad hoc creditor group firmly opposes Shimao's ( SIOPF )

restructuring proposal, (and) will unequivocally vote against

it and other scheme creditors ought to do the same," the

offshore creditor group's financial adviser Houlihan Lokey ( HLI ) said

in a statement.

The group did not cite any reason for the opposition, but

three Shimao ( SIOPF ) creditors told Reuters they were not happy about

the steep haircut in the proposal, as well as a lack of upfront

payments and cash payments in the next four to six years.

Shimao ( SIOPF ), which defaulted on its offshore debt in 2022 after

an unprecedented liquidity crisis hit the sector in mid-2021, on

Monday laid out detailed restructuring terms to revamp its

offshore debt with an aim to cut its debt by 60%.

Shimao ( SIOPF ) would require approval from more than 75% in creditor

value to pass its restructuring proposal. The ad-hoc bondholder

group holds more than 25% of Shimao's ( SIOPF ) outstanding $6.8 billion

dollar bonds.

A separate bank creditor group, advised by Deloitte, holds

around $4.7 billion of loans.

A source close to the bank group said the group was also not

happy with the latest terms, which they think give worse

treatment to the group than when they first started negotiation

in 2022.

Shimao ( SIOPF ) and Deloitte did not immediately respond to request

for comment.

Separately, Deutsche Bank is preparing a

liquidation lawsuit in Hong Kong against Shimao ( SIOPF ), Reuters

reported early this month.

Creditors in both the bondholder and bank groups said after

Shimao's ( SIOPF ) proposal this week that a winding-up petition could be

useful to the negotiation process.

Shimao's ( SIOPF ) creditors would receive a total of 1.1% consent fee

based on the outstanding principal of their debts if they agreed

to support the restructuring by end of April, and 0.6% by end of

May.

(Editing by Sumeet Chatterjee and Kim Coghill)