China developer Country Garden to raise US$300 million

CHINESE property developer Country Garden Holdings will raise US$300 million in a primary placement in an attempt to repay its debts, a term sheet seen by Reuters showed on Monday (Jul 31).

The placement consists of 1,800 million company shares at a fixed price of HK$1.30 per share, representing a 17.7 per cent discount to Monday’s closing price.

Country Garden did not immediately respond to a request for comment.

Shares and bonds in Country Garden and its property services arm, Country Garden Services Holdings, have come under pressure recently due to liquidity concerns despite the company signing a dual-tranche loan deal earlier this month.

The home builder warned earlier in the day that it would post an unaudited net loss for six months ending Jun 30, compared with a net profit of 1,910 million yuan (S$355.3 million) a year earlier.

It blamed the weakness in its real estate business and a rise in project-related impairment provisions for the gloomy view.

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China’s property sector has seen a string of debt defaults by cash-squeezed developers over the past few years, with China Evergrande Group, the world’s most indebted property developer, at the centre of the crisis. REUTERS