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Country Garden Holdings Co., once China's leading property developer, has secured additional time from a Hong Kong court to advance its USD 14.1 billion offshore debt restructuring plan. This extension follows the company's success in garnering support from over 70% of its bondholders. However, key bank creditors, holding significant portions of the debt, have yet to sign on. The court's decision to adjourn the liquidation hearing underscores the complexity and scale of the restructuring, which aims to reduce the company's offshore debt by 78%. Chairperson Yang Huiyan has pledged substantial personal investments to facilitate the process. The company targets completion of the restructuring by December.
Country Garden Holdings Co., a prominent Chinese property developer, has been granted additional time by a Hong Kong court to progress its USD 14.1 billion offshore debt restructuring. This development comes after the company secured backing from bondholders representing over 70% of its debt. Despite this progress, key bank creditors, who hold significant portions of the debt, have not yet agreed to the plan. Advertisement
The court's decision to adjourn the liquidation hearing reflects the complexity of the case, considering the substantial debt involved and the number of creditors. The judge expressed a desire to see meaningful progress in the next hearing. Country Garden has been in discussions with creditors since defaulting on its dollar debt approximately 19 months ago, with the restructuring plan aiming for completion by December.
In April, the company indicated it was nearing finalization of negotiations with a group of seven banks, known as the coordination committee, which holds or controls about 48% of three syndicated loans totaling USD 3.6 billion. Chairperson Yang Huiyan has committed to converting her USD 1.15 billion shareholder loan and investing an additional USD 50 million by acquiring a 60% stake in the company's Malaysian unit, Country Garden Pacificview. Her shareholding is expected to decrease from 52% to no less than 40% upon completion of the restructuring.
Country Garden's restructuring efforts are part of a broader attempt to navigate the ongoing challenges in China's real estate sector, which has seen several major developers, including Evergrande, face significant financial difficulties.
Chairperson Yang Huiyan's personal financial commitments signal a strong dedication to stabilizing the company's operations. As the December target for restructuring completion approaches, the company's ability to unify creditor support will be pivotal in determining its future trajectory in the recovering Chinese property market.
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