Advertisement
Chinese property developer Country Garden announced that its controlling shareholder agreed to convert loans worth USD 1.14 billion into equity as part of its ongoing offshore debt restructuring process. The move follows an agreement reached earlier with key bank creditors on a USD 14.1 billion restructuring plan. The conversion will see new shares issued at HKD 0.60 each, slightly above the market price. Creditor meetings have been scheduled for early November to vote on the proposal, marking another step in the developer's efforts to stabilise its finances amid China's property sector crisis.
Country Garden, one of China's most troubled property developers, stated earlier this week that its controlling shareholder had consented to convert USD 1.14 billion in loans into equity as part of its offshore debt restructuring exercise. In a filing to the Hong Kong stock exchange, the company mentioned that Concrete Win Limited, an entity controlled by the same shareholder, had committed to acquiring new shares to settle the shareholder loans once the restructuring plan takes effect. Advertisement
The shares will be issued at HKD 0.60 each, a slight premium over the recent closing price of HKD 0.59. Country Garden has arranged creditor meetings for early November to vote on its restructuring plan, with separate sessions scheduled for holders of the 2023 and 2026 convertible bonds. A court hearing related to the liquidation petition is slated for January 2026.
The developer had earlier reached an agreement in mid-August with a core group of bank creditors representing nearly half of its offshore debt, marking progress in its USD 14.1 billion restructuring plan. On the operational front, the company disclosed that its contracted sales attributable for September stood at 2.58 billion yuan (USD 361.75 million), representing a 29% decline compared to the same period last year.
Once regarded as China's largest property developer, Country Garden defaulted on billions in offshore bonds in late 2023, joining a long list of developers caught in China's property sector turmoil. The crisis has also engulfed China Evergrande Group, which was ordered to liquidate by a Hong Kong court in 2024 and was delisted from the exchange in August. This event was one of the largest delistings in terms of market value and trading volume in recent years.
Reports from the past month also indicated that another major developer, China Vanke, had entered discussions with key domestic creditors to negotiate lower borrowing costs on billions of yuan in private debt.
Country Garden's decision to convert shareholder loans into equity marks a key step in its efforts to restructure offshore liabilities and regain financial stability. While the company continues to struggle with declining sales and industry-wide challenges, the move signals an attempt to restore investor confidence ahead of creditor voting. With the broader Chinese property market still under strain, major developers such as Country Garden, Evergrande, and Vanke remain focal points in China's ongoing real estate crisis.
Source - Reuters
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
