Shenzhen-listed shares of Jinke, the country's 50th largest property developer by sales, rose 2.5% by midday on Thursday, after jumping as much as 9.4% earlier in the session. Its Hong Kong-listed property management unit, Jinke Smart Services, slipped 1.2%.

Many Chinese property developers have defaulted on their debt obligations since mid-2021, with most of them focusing on a debt restructuring rather than a company reorganisation.

China Evergrande Group, the world's most indebted property developer, was ordered by a Hong Kong court to liquidate last month after it failed to make progress on its offshore debt restructuring.

Jinke said in a filing late on Wednesday it has officially submitted an application to a court in the southwestern city of Chongqing, and a successful reorganisation would improve its balance sheet and continuous operating ability.

If the reorganisation failed, however, the company warned it could face bankruptcy and a delisting.

The Chongqing-based private developer, with $1.6 billion worth of onshore bonds, first defaulted on a yuan debt tranche in May 2022.

In May 2023, Chongqing Hengrui Constructional Engineering, a Jinke supplier, filed a bankruptcy reorganisation petition against the developer in a court, but the petition has not been processed by the court, according to local media.

Last July, the developer entered into an agreement with a unit of state-owned Great Wall Asset management under which the unit would take part as a strategic investor in Jinke's prepackaged reorganisation process.

(Reporting by Clare Jim; Editing by Muralikumar Anantharaman)