Country Garden Services, the property services arm of the Chinese developer Country Garden, has agreed to sell its 1.49% stake in Zhuhai Wanda Commercial Management for 3.14 billion yuan (about USD 446.54 million). This sale is part of the company's strategy to streamline investments, recover capital, and refocus on its main business operations. Once a leading developer, Country Garden is now restructuring its offshore debt after defaulting on USD 11 billion in bonds last year and has reported a significant profit drop of over 38% for the first half of 2024.
Country Garden Services, the property services arm of the Chinese property developer Country Garden, recently announced it has agreed to sell its 1.49% stake in Zhuhai Wanda Commercial Management for 3.14 billion yuan, equivalent to approximately USD 446.54 million. This strategic divestiture will allow Country Garden Services to streamline its investment portfolio, recoup valuable capital, and refocus its efforts on core business operations, aligning with its broader exit strategy.
Once celebrated as one of China's top property developers by sales volume, Country Garden is now grappling with significant financial difficulties. The company is in the process of restructuring its offshore debt after defaulting on USD 11 billion in offshore bonds the previous year. Compounding these challenges, Country Garden has also reported a steep decline in profitability, with a more than 38% drop in profits for the first half of 2024.
In summary, the sale of its stake in Zhuhai Wanda Commercial Management represents a critical move for Country Garden as it attempts to navigate its financial struggles. By divesting non-core assets and concentrating on its primary business activities, the company aims to stabilise and improve its financial standing in a highly competitive market. The substantial decrease in profits highlights the broader difficulties faced by the real estate sector, underscoring the urgency for strategic adjustments. As Country Garden advances with these initiatives, the capital raised from this sale could be instrumental in rebuilding and strengthening its business operations, potentially restoring its status as a leading developer in China.
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