Country Garden to issue HK$270 million new shares to offset debt
Country Garden to issue HK$270 million new shares to offset debt

Country Garden to issue HK$270 million new shares to offset debt

 

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Troubled property developer Country Garden aims to issue HK$270 million ($34.4 million) of new shares, in an effort to pay off money it owes to other companies.

The developer will issue about 350.6 million shares at HK$0.77 each, according to a statement to the Hong Kong stock exchange.

Country Garden won’t receive any cash from the proceeds, it said. The stock will be used to set off money it owes to a subsidiary of Kingboard Holdings Ltd., a Hong Kong-based manufacturer. 

The shares will be used to offset HK$318.8 million that Country Garden owes to Kingboard as part of a loan facility arranged in December 2021. 

Country Garden has missed interest payments on some dollar bonds and warned of “major uncertainties” about note redemptions.

The company faces a series of key dates in coming weeks. Holders of a yuan bond are scheduled to vote this week on its plan to extend payment of a bond effectively due Sept. 4. Country Garden has proposed a grace period of 40 calendar days, as the developer seeks to avert its first default.