China’s Country Garden secures support from some creditors for offshore debt overhaul
CHINESE property developer Country Garden said on Friday it had reached an agreement with creditors holding nearly 30 per cent of its existing offshore bond debt and was close to finalising terms with another group of bank creditors.
The company is now in a restructuring process that aims to cut its US$16.4 billion of offshore debt by 70 per cent. Creditors holding 29.9 per cent of US$10.3 billion in bonds had agreed to the plan, it said.
The embattled developer, which had secured a reprieve from potential liquidation until May 26, was also close to finalising a deal with a lender group made up of seven banks who hold three syndicated loans with an outstanding principal amount of US$3.6 billion.
The real estate firm has offered five restructuring options to its creditors including extending the maturity by as much as 11-1/2 years alongside choosing mandatory convertible bonds and new debt instruments.
The proposed restructuring covers the aggregate outstanding principal amount of US$14.07 billion of its existing debt, Country Garden said.
In a separate relief for the crisis-hit firm, its controlling shareholder, chairperson Yang Huiyan, has agreed to convert her US$1.15 billion shareholder loan.
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Yang will buy a 60 per cent stake in the company’s Malaysian unit Country Garden Pacificview, for US$50 million and use the balance to subscribe to more shares in the company.
The chairperson held a 52 per cent stake in Country Garden as of the end of 2023, according to data compiled by LSEG. Her shareholding will reduce to not less than 40 per cent after the debt restructuring is completed, the company said.
Country Garden’s downturn in fortunes, culminating in an US$11 billion default after its reign as China’s top developer by sales, intensified a debt crisis that was already gripping rivals such as Evergrande.
In March, it said its net loss attributable narrowed to 32.8 billion yuan (S$5.93 billion) in 2024, down from a record loss of 178.4 billion yuan for 2023, even as it battles a liquidation petition brought by Ever Credit, a unit of Hong Kong-listed Kingboard. REUTERS
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