Country Garden given more time for debt talks by Hong Kong court

A HONG Kong court granted Chinese builder Country Garden Holdings more time to try to reach an agreement with creditors, delaying a hearing on a winding-up petition to May 26.

The company, which defaulted on US dollar debt in 2023, said it expects to reach a deal with offshore creditors on the debt plan in the first half of 2025, according to a statement to Bloomberg News last week.

Like many of its peers, Country Garden continues to struggle amid the nation’s property crisis and its path forward remains difficult. The builder said earlier this month that it had reached an understanding with a bank creditor group over its debt proposal. But the company has not yet secured support from a key bondholder group.

The liquidation petition was filed by Ever Credit, a unit of laminates maker Kingboard Holdings, in February last year. The main purpose of such a petition is to speed up the debt-restructuring process by pressuring the defaulted company to come up with a repayment plan through negotiations with creditors.

Country Garden reported delayed results earlier this month, showing a record loss of 178.4 billion yuan (S$33.3 billion) in 2023. It also reported a narrowed loss in the first half of 2024 to 12.8 billion yuan from 48.9 billion yuan in the same period a year earlier.

The builder blamed the 2023 loss on a “huge impairment provision” on properties under development and completed homes held for sale. It said its full-year loss for 2024 should narrow “substantially” from 2023, but it could not predict when it would be profitable again. BLOOMBERG