China’s Country Garden Expects to Reach Terms with Creditors by February
China’s Country Garden, a property developer, expects to reach terms with creditors next month regarding the restructuring of $16.4 billion in offshore debt. The company’s lawyer told a Hong Kong court on Monday that Country Garden plans to apply for court approval of the terms in April.
The company was granted an adjournment until May 26 in a hearing held to gauge the extent to which restructuring is progressing ahead of a decision on a liquidation petition. Country Garden’s lawyer requested time to resolve three “sticky points” in negotiation with two major groups of creditors.
The issues relate to the lender group releasing its security package in exchange for compensation, the conversion price of convertible bonds, and the terms of new notes. Country Garden has proposed restructuring that would cut offshore debt by 70% and has reached an “understanding” with a lender group.
If Country Garden does not reach an agreement with creditors by February-end, parties including the petitioner and creditors can apply to bring the next hearing forward. Ever Credit, a unit of Hong Kong-listed Kingboard, filed a petition against Country Garden in February for not repaying a $205 million loan.
Country Garden was once China’s biggest developer by sales, but it defaulted on $11 billion in offshore bonds in late 2023, deepening a debt crisis in the sector. Averting liquidation would allow Country Garden to return its focus to a property sector blemished by unfinished homes and shattered buyer sentiment.