Country Garden Real Estate Group, the subsidiary of China’s top private property developer Country Garden, will suspend trading of its 11 onshore bonds from Monday, according to filings to the stock exchanges in Shenzhen and Shanghai on Saturday.
Resumption of trading of the bonds will be determined at a later date, it said.
The company said it’s planning to hold meetings with bondholders on the repayment arrangements in the near future. It reiterated it will take measures to defuse risks and protect the legitimate rights of its investors while ensuring home deliveries.
Bonds and shares of Country Garden have plunged this week after the developer said last Tuesday that it had missed two dollar bond coupon payments due on August 6 totalling $22.5 million, raising concern it will be the next property giant to default.
The company’s shares fell as much as 14% on Friday in Hong Kong before closing below HK$1 for the first time ever. It has tumbled 63% this year, making it the worst-performing constitute of the Hang Seng Index.
The company’s Chairwoman Yang Huiyan and President Mo Bin apologised in a statement on Friday, vowing to take more powerful and effective measures to ensure home delivery and to address periodic liquidity stress.
The announcement came after media report that Country Garden is preparing a bond restructuring due to liquidity pressure. The company will likely first restructure its onshore bonds and has hired China International Capital Corporation (CICC) as its financial advisor for the issue, reported Chinese news outlet Caixin. Read more …
A separate report by Chinese media Yicai also said that Country Garden has started the preparation for a debt restructuring and hired CICC to arrange the issue.
The struggling homebuilder is considering extending some soon-to-mature notes, according to a report by Bloomberg News.