Chinese property developer Country Garden Holdings Co (碧桂園) yesterday said that it cannot repay on time a HK$470 million (US$60 million) loan in the latest sign of distress in the industry after Beijing clamped down on mounting debts in the industry.
The company said in a filing to the Hong Kong Stock Exchange that it “expects that it will not be able to meet all of its offshore payment obligations when due or within the relevant grace periods,” including US dollar notes it has issued.
The company’s Hong Kong-traded shares yesterday sank 10.7 percent.
Photo: AFP
Its liquidity crisis suggests developers remain under pressure even after regulators lifted some controls on housing purchases to alleviate troubles in the industry.
The company recently received loans from banks, including a US$50 million loan from China Minsheng Banking Corp (中國民生銀行) earlier this year on top of a separate US$280 million loan from the Hong Kong unit of the Industrial & Commercial Bank of China (中國工商銀行) in December last year.
Country Garden said its sales faced “remarkable” pressure after the property sector went under “profound adjustments.”
Its sales slumped nearly 44 percent in the first nine months of this year compared with the period a year earlier, the company said.
Since there has not been an industrywide improvement in property sales, Country Garden said that “its liquidity position is expected to remain very tight in the short- to medium-term.”
Last month, the company made interest payments on two securities before the end of a 30-day grace period. As of June, it still had more than US$180 billion in liabilities.
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