China property crisis: troubled Country Garden fights to avert default as US$15 million offshore debt deadline looms

The admission of possible default in a statement last week signalled the start of efforts by the Chinese property giant to restructure some of its US$16.5 billion of offshore debts.

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China real estate woes: Evergrande files for bankruptcy protection in New York

China real estate woes: Evergrande files for bankruptcy protection in New York

The Foshan-based company has hired China International Capital Corp and Houlihan Lokey as its joint financial advisers, and Sidley Austin as its legal adviser, to evaluate its capital structure and liquidity, the statement said.

Country Garden’s contracted home sales fell to 6.17 billion yuan in September of this year, the company said in an exchange filing, from about 8 billion yuan in August. That compared with 32 billion yuan recorded in September of 2022, depriving the developer of a crucial source of cash flow.

The builder had 257.9 billion yuan (US$35.26 billion) of interest-bearing debt as of June 30 this year, with 603.6 billion yuan worth of unfinished homes due to be delivered to buyers, according to its latest interim report.

Its co-founder, Yeung Kwok-keung or Yang Guoqiang in Mandarin, recently showed up in public during a site inspection in Guangdong’s Shunde city, where he urged workers to ensure construction quality, according to a statement issued by the company last Friday.

With its estimated 118.5 billion yuan of non-yuan debt, a default by Country Garden would mark one of the largest offshore debt restructurings among Chinese developers.

Evergrande will discuss a proposal to delay repayment of an onshore bond coupon due October 19 by one year at a meeting with bondholders scheduled for Wednesday and Thursday of this week, according to a statement issued Hengda Real Estate late on Monday.