BEIJING: Deeply indebted Chinese developer Country Garden has delayed the deadline for a vote by bondholders on whether to extend repayment on a key note until next week, as it flirts with a potentially catastrophic default, Bloomberg reported on Friday (Aug 25).
One of China’s biggest builders, Country Garden has accumulated debts of more than US$150 billion and said this month it had failed to make interest payments on two bonds – putting it at risk of default.
The company has asked to extend payment on a 3.9 billion yuan (US$535 million) note until 2026, originally setting an online vote among bondholders to end at 10pm Beijing time on Friday.
However Bloomberg News, citing a filing to the Shanghai Stock Exchange’s private disclosure platform, reported just hours before the original deadline that the company had pushed it back to Aug 31.
If bondholders refuse, Country Garden could become the biggest Chinese real estate firm to default since rival Evergrande in 2021.
The company also faces a deadline for a separate bond payment at the beginning of September.
Country Garden’s cash flow problems have ignited fears that it could collapse and spread turbulence through China’s economy and financial system.