The logo of the Chinese developer Country Garden. Photographed on August 18, 2023 in Tianjin, China.Reuters/Tingshu Wang/File photo Obtaining license rights
HONG KONG, Sept 11 (Reuters) – Troubled developer Country Garden said on Monday that it had evaded two last-minute debt defaults this month to give crisis-hit Chinese companies some breathing room. face a new vote by creditors to extend the debt maturity of real estate sector.
Voting is expected to close by 10pm Hong Kong time on Monday, with domestic creditors approving Country Garden’s (2007.HK) proposal to extend the repayment of eight domestic bonds for three years. You will have to decide whether or not to do so.
The latest vote came after the country’s largest private developer received approval from its creditors on Sept. 1 to extend the payment of a 3.9 billion yuan ($533 million) land-based private bond for three years.
The vote was postponed twice before Country Garden’s proposal received the support of 56.08% of participating creditors. Last week it paid off bond coupons at the last minute and avoided a default in the offshore market.
Country Garden bondholders will individually vote Monday on proposals to extend the maturities of eight land-based bonds issued by the development company and subsidiaries that were due to mature in 2023 and 2024.
Country Garden did not immediately respond to a request for comment.
Country Garden, one of the few major Chinese developers not to default, faces liquidity pressure as sales plummet and less cash is available, interim financial statements show. It is
The company has debt worth 108.7 billion yuan ($14.9 billion) due within 12 months, but had cash levels of about 101.1 billion yuan at the end of June, according to its interim financial report.
In the offshore market, Country Garden has at least five coupon payments due this month, including two relatively large dollar bonds worth $15 million due Sept. 17 and Sept. 27. It includes two expiring $40 million worths, each with a grace period of 30 days.
A Country Garden default could exacerbate the domestic real estate crisis, putting more strain on struggling banks and delaying the recovery of not just the real estate market but the Chinese economy as a whole. .
Nicholas Cheng, an analyst at Singapore-based research firm CreditSights, said Country Garden has so far shown a “higher willingness to avoid default” than many of its peers. Stated.
Mr. Chen expects Country Garden to continue its efforts to extend bond maturities in both onshore and offshore markets given its insufficient liquidity position.
He also said that the specific intervention was unclear, but that Chinese regulators could be involved with the developer due to “potential contagion risks to other upstream and downstream sectors, as well as various local governments.” He said it was highly sexual.
(1 dollar = 7.3490 Chinese Yuan)
Report by Xie Yu. Edited by Smeet Chatterjee and Lincoln Feast.
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