Creditors Investigate Country Garden's Malaysia Project Amid Financial Struggles

As cash-strapped developer Country Garden grapples to avoid default, its extensive $100 billion development project in Malaysia has drawn scrutiny from creditors.

Presently, with development ongoing, Country Garden's $100 billion development project in Malaysia is home to fewer than 10,000 people, which represents only about 1% of its intended population. I Photo: Forest City Malaysia / PR Newswire

Meanwhile, Malaysia offers financial incentives to attract investments, as reported by Xinghui Kok and A. Ananthalakshmi for Reuters.

Country Garden's Forest City development, situated in the state of Johor next to Singapore, was initially billed as a paradise with turtles and white-sand beaches. It aimed to accommodate 700,000 people across 7,000 acres on four reclaimed islands by its projected completion in 2035.

Seven years into the project, Country Garden has invested 20 billion ringgit ($4.3 billion) in Forest City, a far cry from the initial $100 billion plan.

Presently, with development ongoing, the project is home to fewer than 10,000 people, which represents only about 1% of its intended population.

Forest City has come to symbolize the risks that Country Garden and some of its Chinese peers undertook with their debt-fueled construction boom, not only within China but also in offshore markets.

As the company grapples with weak cash flow and significant repayment obligations, analysts suggest that Country Garden's ability to allocate additional capital to the project is increasingly challenging.

Furthermore, the Chinese developer is unlikely to see a significant revenue boost from the project in the near future.

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