HONG KONG: As the largest private estate developer in China struggles with debt restructuring, Country Garden Holdings expressed concern that it might not be able to fulfill all of its seaward payment obligations on time or within the required grace periods.
In a filing on Tuesday, October 10, the company stated that” for non-payment may result in relevant creditors of the group demanding motion of transaction of appropriate indebtedness owed to them or pursuing enforcement action.”
According to Country Garden, the group is currently dealing with” significant” uncertainty regarding how to dispose of its assets, and its cash position is still under pressure.
Since a cash problems hit the industry in 2021, an increasing number of Chinese property developers have defaulted on loan commitments. Demand in China’s real estate market has decreased in line with a wider economic decline, which has made the crisis worse.
Despite a 30-day joy period, Country Garden was required to pay US$ 66.8 million in ties on 2024 and 2026 on Monday.
The developer will face yet another significant test later this month when, if it doesn’t pay a US$ 15 million September discount by October 17, its whole offshore debt may be deemed in default.
Country Garden has 42.4 billion yuan( US$ 5.81 billion ) worth of loans that are not denominated in Yuan and US$ 10.96 billion in offshore bonds. The company or its resources run the risk of being liquidated by debts if it defaults, necessitating the restructuring of these payments.
For the nine months leading up to September, the company reported contracted income of about 154.98 billion renminbi, down by roughly 43.9 percent and 65.4 percent from the corresponding years in 2022 and 2021.
To assess its capital structure and liquidity position, it claimed to have appointed investment bank Houlihan Lokey, China International Capital Corporation( CICC ), and law firm Sidley Austin as advisors.