China’s Country Garden says might not meet all debt obligations

BEIJING, CHINA — Debt-saddled Chinese property giant Country Garden said Tuesday that it did not expect to meet all of its offshore payment obligations in time as it battles to avoid default.

In a note shared on the Hong Kong Stock Exchange website, the firm said it “expects that it will not be able to meet all of its offshore payment obligations when due or within the relevant grace periods”.

“Such non-payment may lead to relevant creditors of the Group demanding acceleration of payment of the relevant indebtedness owed to them or pursuing enforcement action,” the firm warned.

The firm also said it had not been able to repay a debt of HK$470 million (US$60 million).

It went on to ask “for patience from creditors” as it seeks to “assess the current challenges”.

Country Garden — one of China’s biggest property developers — had racked up debts estimated at 1.43 trillion yuan (US$196 billion) by the end of 2022.

Its cash flow problems have ignited fears that it could collapse with consequences for China’s economy, which is already suffering from record-high youth unemployment, flagging consumption and a broader crisis in the real estate sector.

— AFP