HONG KONG, June 25 (Reuters) - Shimao Group ( SIOPF )

has sweetened its offshore debt restructuring terms to garner

support from creditors, said three sources, as the Chinese

property developer scrambles to fend off a liquidation petition

filed in a Hong Kong court.

Shimao ( SIOPF ) will on Wednesday face its first court hearing into

the liquidation petition filed by state-owned lender China

Construction Bank (Asia) over unpaid loans of HK$1.58 billion

($201.75 million).

The sweetened offer from Shimao ( SIOPF ) comes after its creditors

strongly opposed a restructuring plan it first laid out in March

after having defaulted on its $11.5 billion offshore debt in

2022, said the sources familiar with the matter.

In its revised proposal, Shimao ( SIOPF ) has offered "mildly"

improved terms including an increase in the minimum cash

creditors will be able to collect, one of the sources said,

without providing further details.

The source added Shimao ( SIOPF ) and some of its creditors were also

negotiating other terms of the restructuring, including its

offer of exchanging debt for mandatory convertible bonds.

The sources declined to be named as they were not authorised

to speak to media.

Shimao ( SIOPF ) did not respond to request for comment.

Sources previously told Reuters that creditors opposed the

March terms because of the size of the losses involved and the

lack of upfront payments if the deal was approved.

A growing number of Chinese developers in default are

working on debt restructuring plans after failing to meet their

offshore debt repayment obligations since 2021, when a stifling

liquidity crisis hit the economically crucial property sector.

Some of those negotiations have continued for a long time

due to disagreement between the developers and their creditors

over the terms of the restructuring plans amid a worsening

outlook for the Chinese property sector.

China's new home prices fell at the fastest pace in more

than 9-1/2 years in May, official data showed last week, with

the sector struggling to find a bottom despite Beijing's efforts

to rein in oversupply and support debt-laden developers.

Only a handful of the dozens of major developers that have

been in various stages of their debt restructuring plans have

been successful in getting the proposals approved by creditors.

Shimao's ( SIOPF ) latest 1.1% early consent fee deadline - which it

has already extended twice - to give creditors an incentive to

support the restructuring plan expires on Friday. It has not

provided details of the support to date.

The developer needs approval from creditors who collectively

hold more than 75% of its offshore debt to implement the

restructuring proposal and avert a potential liquidation court

order.