Country Garden: A liquidation petition hits China’s largest real estate company

The largest private real estate developer in China, Country Garden, is the target of a Hong Kong-filed liquidation petition from a creditor. An Ever Credit Ltd. company filed a case alleging nonpayment of a HK$1.6 billion ($204.5 million; £161.2 million) loan. Country Garden said it would “resolutely oppose” the petition. Country Garden defaulted on its overseas debt in October. A Hong Kong court ordered rival real estate behemoth China Evergrande to dissolve last month. Ever Credit is a division of Kingboard Holdings, a real estate investor and manufacturer of laminates. The case is scheduled to be heard in court on May 17. Following the announcement, Country Garden’s stock dropped more than 10% in early Hong Kong trading.

 

It happens one month after a Hong Kong court ordered Evergrande, the most indebted real estate firm in the world, to be liquidated. With almost $300 billion (£236 billion) in debt, the company has become the face of China’s real estate catastrophe. In order to assess Evergrande’s overall financial situation and determine viable reorganization plans, liquidators have been hired. This can entail taking possession of and liquidating assets in order to use the money raised to pay off outstanding debts. But given that many common Chinese aspirants to homeownership are still waiting for apartments for which they have already made payments, the Chinese authorities could be hesitant to see construction on real estate projects come to an end.

 

Given that the property market in China makes up one-third of the country’s GDP, issues there are having a significant effect. Since the introduction of steps by the authorities in 2021 to limit the amount that large real estate corporations might borrow, the industry has been severely financially squeezed. Since then, a number of sizable real estate developers have fallen behind on their payments in recent years.

Be the first to comment

Leave a Reply

Your email address will not be published.


*