2023-09-02 07:28:49
Country Garden
The Country Garden Group, one of the largest real estate development groups in China, has won the approval of its creditors to extend the deadline for repayment of payments owed to it, allowing it to avoid default, according to Bloomberg Agency, Saturday.
The creditors voted to extend the repayment period for 3.9 billion yuan (about 500 million euros) of loan bonds to 2026. If they refused, the company would have defaulted, becoming the largest Chinese real estate group to default since Evergrande in 2021.
However, the creditors agreed late Friday to extend the payment deadline, which was expiring on Saturday, by three years, according to Bloomberg.
The group did not confirm the outcome of the vote.
Despite obtaining an additional deadline, Country Garden, which was the largest real estate developer in China last year, has not completely escaped the danger, as it faces the expiration date next week of two loan interest payments worth $22.5 million.
At the beginning of August, the group was unable to pay the two dues, and it obtained a grace period of thirty days, which ends on Tuesday.
In an indication of the difficulty of the company’s financial situation, Moody’s agency downgraded the credit rating of “Country Garden” further this week, justifying this action with financial obligations that are “highly speculative and are likely to be in default or very close to it.”
The group recorded record losses in the first half of the year exceeding 6.1 billion euros, compared to a slight profit a year ago of 77 million euros, according to its current value.
And the company warned on Wednesday when publishing its financial results that it had “done everything in its power” to pay its dues and did not rule out “defaulting in payment”.
Country Garden Real Estate Development Company, which was considered for a long time financially solid, suffers from huge debts that raise fears of defaulting on payment, which will affect the financial system in China, two years after its competitor Evergrande failed to pay its dues.
The difficulties facing the two groups add to the crisis of a sector that has already suffered from the health crisis and the economic slowdown in China.
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