The respite for struggling real estate developer Country Garden is short-lived.
After the company was able to avert a default on Saturday by extending the repayment period for a bond worth around 500 million euros, two more dollar bonds are due on Tuesday. Country Garden announced last month that it would not pay interest on its $22.5 million notes due Aug. 6. Both payments were subject to a 30-day grace period that expires on Tuesday. Country Garden did not initially respond to a query from Reuters. If the real estate developer fails to make the payments before the grace period ends, the company risks defaulting and other bondholders demanding early repayment, bondholders and lawyers said. This adds to market fears that the construction company could face a deepening liquidity squeeze. A collapse of Country Garden could exacerbate China’s housing crisis and dampen overall prospects for a recovery in the world’s second largest economy. The real estate sector accounts for a quarter of the economic output of the People’s Republic.
Country Garden shares temporarily fell 0.98 percent to HK$1.01 in Hong Kong trading.
(Report by Xie Yu and Siddarth S., written by Katharina Loesche. If you have any questions, please contact our editorial team at [email protected]
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