Chinese property developer Country Garden plans deal with creditors, as industry languishes

HONG KONG (AP) – Chinese real estate developer Country Garden expects to reach a deal with its creditors to restructure billions of dollars in debt in February, a lawyer for the company said in a Hong Kong court on Monday.

Country Garden, one of China’s biggest real estate companies, defaulted on $11 billion in offshore bonds due in 2023 and said earlier this month that a debt restructuring proposal would reduce $16.4 billion in offshore debt by 70 percent.

A Hong Kong court adjourned Country Garden’s case until May 26 after the company requested more time to reach a deal with creditors.

Country Garden is one of dozens of real estate companies caught up in a fight against excessive borrowing, which has forced many into default. It said last week that it would default on 12.84 billion yuan ($1.76 billion) in the first six months of 2024. ) posted a net loss of 178.4 billion yuan ($24.4 billion) in 2023.

The company postponed the publication of interim results for 2023 and 2024.

The debt-laden property sector, once one of the strongest engines of growth in the world’s second-largest economy, is struggling to emerge from a prolonged slump.

Home prices across China have fallen, even as policymakers have taken measures such as cutting mortgage costs, lending to property developers and making it easier to buy homes.