Country Garden abruptly canceled its $300 million primary share placement, according to a report by IFR that cited bookrunner JPMorgan.
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The Hong Kong-listed shares of Country Garden plunged 5.06% on Tuesday after reports emerged that the Chinese real estate developer had scrapped its planned $300 million share placement.
The purpose of the share placement was to assist Country Garden in repaying its debts.
Additionally, Country Garden Services, its property services arm, experienced a 0.57% decline, while other Chinese property stocks also suffered. The Hang Seng Mainland Property Index, which tracks Chinese property companies listed in Hong Kong, fell by 0.33%.
In a similar vein, Logan Group saw a 4.21% decline, China Vanke dropped by 0.73%, and Sunac declined by approximately 2%.
In yet another blow to China’s struggling property sector, Country Garden reportedly canceled its share placement shortly after midnight. The news was first reported by IFR, with bookrunner JPMorgan as the source.
A primary share placement involves the purchase of new shares through new issuances. According to Reuters, the placement consisted of 1,800 million company shares priced at HK$1.30 per share, representing a 17.7% discount to Monday’s closing price.
Country Garden is one of the largest property developers in mainland China.
Last week, JPMorgan downgraded Country Garden and Country Garden Services to underweight, while also significantly reducing the target price for both entities.
China’s property sector continues to grapple with the repercussions of a credit crisis resulting from the government’s crackdown on excessive debt levels in 2020.
— This report includes contributions from CNBC’s Clement Tan.
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