Country Garden is still seeking to avoid liquidation and pull off a debt restructuring,which promises to be one of the biggest such exercises in the world’s second-largest economy.Credit:Bloomberg
The announcement came after the Guangdong-based developer defaulted on a dollar bond in October,overtaking rival China Evergrande Group as the epicentre of the property crisis. Country Garden is still seeking to avoid liquidation and pull off a debt restructuring,which promises to be one of the biggest such exercises in the world’s second-largest economy.
Country Garden’s setback adds to China’s property turmoil that’s weighing on the economy. The property market and related industries at its peak accounted for about 20 per cent of China’s gross domestic product. Helmed by one ofChina’s richest women,Yang Huiyan,Country Garden has about $US10 billion ($15.3 billion) of offshore bonds outstanding,according to data compiled by Bloomberg.
Once the nation’s largest developer by sales,the company employed 130,000 people,housed tens of thousands of families and accumulated $US240 billion in liabilities.
Country Garden’s dollar bonds trade at deeply distressed levels of around 8¢ on the dollar,showing how little money investors expect to recover,after some were near 80¢ in June. Its shares fell 4.2 per cent at the open on Wednesday,bringing the loss in the past 12 months to 71.3 per cent.
China’s property crisis has crippled the economy.Credit:Bloomberg
Country Garden’s winding-up petition “is likely a necessary process for the petitioner,” said Zhi Wei Feng,a senior analyst at Loomis Sayles Investments Asia. “To other creditors,it is good to see some push factor.”
Ever Credit is a unit of Kingboard Holdings,which in October issued a so-called statutory demand to Country Garden for repayment.