April 8 (Reuters) - Chinese developer Shimao Group said on Monday China Construction Bank (Asia) had filed a liquidation petition against it in Hong Kong over unpaid debts, a rare case of a state-owned bank taking such legal action in the property downturn.

The petition centers on Shimao's failure to repay loans of HK$1.58 billion ($201.75 million) and contrasts with legal processes against rival firms such as China Evergrande Group and Country Garden for defaulting on their debts that were launched by overseas-based creditors.

The loans include direct lending from China Construction Bank (CCB) to Shimao and the bank's participation in syndicated loans from a club of lenders to the developer, according to a source with direct knowledge of the matter who could not be named because the information is confidential.

CCB did not respond to a request for comment on the petition or the composition of its loans to Shimao.

Shimao's Hong Kong-listed shares ended down 18.7% at HK$0.37, a record low. The Hang Seng Mainland Properties Index was down 0.2%.

Shimao said in a stock exchange filing it would "vigorously" oppose the lawsuit and press on with a plan to restructure about $11.7 billion of offshore debt, with an aim of cutting it by 60%.

"The company is of the view that the Petition does not represent collective interests of the company's offshore creditors and other stakeholders," Shimao said in the filing.

It did not respond immediately to a request for further comment on the petition, which was filed to the Hong Kong High Court that oversees all liquidation processes in the city. The first court hearing is on June 26, according to the court's website.

CHINA PROPERTY CRISIS

China's property sector has been in crisis since 2021 after a regulatory crackdown on high leverage among developers triggered a liquidity crunch.

Mainland authorities have not rolled out massive stimulus to support developers, instead adopting a long series of incremental steps aimed at reviving the sector.

"Typically banks would prefer to work with troubled creditors if they demonstrated willingness and ability to work with banks to come up with a repayment plan," said KT Capital researcher Fern Wang, who publishes on Smartkarma.

"In this situation, it is very likely China Construction Bank (Asia) is running out of options and thus is seeking the liquidation of Shimao."

Shanghai-based Shimao is among the many Chinese developers that have defaulted on offshore bonds, after it missed the interest and principal payment for a $1 billion offshore bond in July 2022. After that missed payment, its entire $11.7 billion worth of offshore debt is in default.

Shimao in late March laid out detailed debt restructuring terms.

A group of major bondholders has already flagged its opposition to Shimao's restructuring plans, which sources told Reuters was due to the size of the losses the creditors would face and the lack of upfront payments.

Shimao 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 outstanding $6.8 billion dollar bonds.

"I believe each creditors will seek to work in their own best interest to recover as much as possible, given that the business of the company is no longer viable," said Leonard Law, senior credit analyst at Lucror Analytics.

"Shimao has met some creditor pushback for its offshore debt restructuring proposal, so this (CCB petition) could be a means to pressure the company and controlling shareholder to offer better terms."

Deutsche Bank was considering taking similar steps against Shimao as CCB has done, Reuters reported in early March citing sources, after it found the developer's earlier debt restructuring terms unacceptable.

China's property sector remains weak but the declines so far in 2024 are not as steep as a year earlier.

($1 = 7.8289 Hong Kong dollars) (Reporting by Scott Murdoch in Sydney and Himanshi Akhand in Bengaluru; Additional reporting by Ziyi Tang in Beijing; editing by Jamie Freed)