Chinese real estate giant Country Garden wins vote to avoid default

Chinese property developer Country Garden has obtained the green light from its creditors to extend the repayment term of a crucial bond and avoid a default, the Bloomberg economic outlet reported on Saturday.

The holders of bonds of the company agreed on Friday night the conditions to postpone to 2026 the repayment of 3.9 billion yuan (535 million dollars) scheduled for Saturday, according to the outlet.

If they had opposed the extension, Country Garden could have become the largest real estate firm in the Asian giant to go into receivership since its rival did evergrande in 2021.

Country Garden He did not immediately comment.

The group was unable to repay $22.5 million in interest on two loans in early August, at a time when the real estate sector is experiencing an unprecedented crisis in China.

The company, which was still China’s biggest property developer last year, is not yet out of the woods.

Another term expires next week for the payment of the two interests that he did not pay in August. If you don’t, Country Garden You run the formal risk of default, as your 30-day grace period ends on Tuesday.

Country Garden estimated its debt at about 1.15 trillion yuan ($165 billion) by the end of 2022, but according to the agency Bloomberg, the figure would be about 1.4 trillion yuan (193 billion dollars).

Its situation has raised fears of a bankruptcy with immeasurable consequences for the Chinese financial system, two years after the collapse of its competitor. evergrande.

Country Garden “It does not have sufficient treasury resources to face its upcoming bond maturities,” according to Moody’s, which on Thursday lowered the group’s credit rating three notches.

The problems of evergrande and Country Garden, two real estate giants, have further weakened a sector that was already reeling from the health crisis and the economic slowdown in China.

(With information from AFP)