Country Garden Holdings, a prominent Chinese real estate developer, has raised concerns over its ability to meet offshore debt repayments, including those issued in U.S. dollars. The company recently missed a debt repayment of 470 million Hong Kong dollars ($60 million), adding to the growing worries about China’s property sector. This missed payment could potentially trigger creditors to demand faster debt repayments or take enforcement action. Country Garden’s shares dropped 1.19% following this announcement, in contrast to the broader Hang Seng index, which saw a 2% increase.
Country Garden says it may not be able to repay debt
In early September, the company narrowly avoided default by making $22.5 million in bond coupon payments and securing creditors’ approval to extend repayments on six onshore bonds by three years. However, the challenges continue as the firm faces a decline in contracted sales for the sixth consecutive month, down by 80.7% compared to the previous year. Amid a lack of improvement in property sales industry-wide, Country Garden anticipates uncertainty in its liquidity position and asset sales in the short and medium term. This situation reflects broader issues within China’s property market, as giants like Evergrande and Country Garden grapple with mounting debt problems, causing concerns that ripple through the sector and affect consumer confidence.
