Country Garden Faces Default As Sales Hit Rock Bottom

Chinese developer Country Garden Holdings Co. has intensified warnings that it's heading for its first-ever default and has engaged advisers, marking strong indications that the company is on the path to a major restructuring, as reported by Alfred Liu and Felix Tam for Bloomberg News.

The builder stated that it anticipates it won't be able to meet all of its offshore payment obligations. I Photo: Wikimedia Commons

The builder stated that it anticipates it won't be able to meet all of its offshore payment obligations, including those under the US dollar notes issued by the company, when due or within the relevant grace periods.

This non-payment may lead to relevant creditors of the Group demanding acceleration of payment or pursuing enforcement action.

Country Garden, which has come to symbolize China's broader property debt crisis, disclosed that it had not made a due payment in the amount of HK$470 million ($60 million) under certain of its indebtedness.

It has also missed initial deadlines for paying interest on several bonds in recent weeks, with some grace periods ending later this month. The company has $11 billion of offshore bonds outstanding, according to data compiled by Bloomberg.

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