Signage at a residential project developed by Country Garden Holdings Co. in Baoding, Hebei province, China, on Tuesday, Aug. 1, 2023.
Bloomberg | Bloomberg | Getty Images
Chinese real estate developer Country Garden Holdings highlighted its difficulties in making offshore repayments, particularly in relation to its U.S. dollar notes.
The company failed to repay 470 million Hong Kong dollars ($60 million) of its debt, as of Tuesday.
Country Garden cautioned that this could lead to accelerated debt repayments or enforcement actions taken by creditors. Meanwhile, the company’s shares declined 1.19% compared to the broader Hang Seng index, which saw a 2% increase.
In early September, the company narrowly avoided default by making $22.5 million in bond coupon payments and receiving approval from creditors to extend the repayment period for six onshore bonds by three years.
Furthermore, Country Garden’s contracted sales for September amounted to 6.17 billion yuan ($846 million), marking the sixth consecutive month of decline and an 80.7% decrease compared to the previous year.
Looking forward, the company anticipates uncertainty in its liquidity position and short to medium-term asset sales due to the lack of substantial improvement in property sales industry-wide.
Debt problems have plagued major Chinese property developers such as Evergrande and Country Garden, causing a decline in consumer confidence within the sector.
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