Country Garden Holdings has said a liquidation petition has been filed against the property developer for non-payment of a loan worth $205m, adding to the woes for China’s liquidity crisis-hit property sector.
Country Garden said in a regulatory filing to the Hong Kong Stock Exchange it would “resolutely” oppose the petition, which was filed by a creditor, Ever Credit Limited, a unit of Kingboard Holdings. A court hearing has been set for 17 May.
Country Garden’s shares fell more than 12% in early trading on Wednesday.
The petition is set to revive homebuyer and creditor concerns about the Chinese property sector’s debt crisis, at a time when Beijing is ramping up efforts to boost confidence in the industry that accounts for a quarter of China’s GDP.
It comes a month after China Evergrande Group, the world’s most indebted property developer with $300bn in liabilities, was ordered to be liquidated by a Hong Kong court. It now faces a complicated restructuring process that some investors think could last more than a decade.
China’s property industry, a pillar of the world’s second-largest economy, has lurched from one crisis to another since 2021 after a regulatory crackdown on debt-fuelled construction triggered a liquidity squeeze.
A string of developers have defaulted on their repayment obligations since then, and many of them have either launched or are in the process of starting debt restructuring processes to avoid facing bankruptcy or liquidation proceedings.
Source: www.theguardian.com
