Country Garden, one of China’s largest real estate developers, intends to close a deal in February to restructure its substantial debt burden, which amounts to billions of dollars. The company’s legal representative made the announcement on Monday during proceedings at a Hong Kong court.
The developer defaulted on $11 billion in offshore bonds in 2023 and aims to cut $16.4 billion of offshore debt by 70% through its new proposal. Consequently, a Hong Kong court has granted an extension of the proceedings to May 26, allowing Country Garden more time to negotiate with its creditors.
This development is part of a broader crisis in China’s heavily indebted real estate market, which has been under scrutiny due to excessive borrowing. Despite efforts by policymakers to ease the downturn by reducing mortgage rates and facilitating developer borrowing, the property sector remains in distress, marked by declining home prices and significant losses among developers.
(With inputs from agencies.)