Country Garden Eyes Debt Deal; Evergrande May Face Liquidation

China's Country Garden may soon announce a restructuring of its offshore debt, as reported by local media.

Country Garden holds $10.96 billion in offshore bonds and 42.4 billion yuan ($5.81 billion) worth of loans not denominated in yuan. I Photo: PR Newswire

In parallel, bondholders of the embattled peer, China Evergrande Group, have raised concerns about a possible liquidation as the company's debt plans encounter difficulties, Claire Jim and Scott Murdoch reported for Reuters.

Country Garden, which missed two dollar interest payments last month, has two coupons totaling $66.8 million due on Monday.

Media outlet Cailianshe suggested that the company might announce a restructuring soon.

Country Garden holds $10.96 billion in offshore bonds and 42.4 billion yuan ($5.81 billion) worth of loans not denominated in yuan. In the event of a default, these debts would require restructuring, and the company or its assets could potentially face liquidation by creditors.

The coupons due on Monday are linked to Country Garden's 6.5% April 2024 and 7.25% April 2026 bonds.

While these payments have a 30-day grace period, the developer faces a critical test later this month, when its entire offshore debt could be declared in default if it fails to pay a $15 million coupon due in September by October 17.

China's property sector has grappled with a debt crisis since 2021, with many private property developers, accounting for 40% of Chinese home sales, defaulting on debt obligations, leaving numerous construction projects unfinished.

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