Beijing: Country Garden Real Estate Group Co Ltd says it will suspend trading in nearly a dozen onshore bonds starting today, two days after the Chinese real estate company’s controlling shareholder said it would report a multi-billion-dollar loss for the first half of this year.
Six yuan-denominated corporate bonds issued in 2021 and 2022 will be suspended from trading effective at the market opening, the company, formerly China’s largest developer by sales, said in filings to Shenzhen Stock Exchange last Saturday night.
Three additional corporate bonds will also be subject to suspension on the Shanghai Stock Exchange, according to filings on the Chinese bourse. Guangdong Tengyue Construction Engineering Co, a subsidiary of Country Garden Holdings Co, Country Garden Real Estate Group’s controlling holder, made the same decision on one bond. Local media said a Country Garden private placement bond will be suspended as well.
Representatives of Chinese bank CICC told some Country Garden noteholders that its bond-underwriting team has been engaged to explore options for the builder’s yuan-note maturities, Bloomberg reported last Friday. The struggling builder is considering extending some soon-to-mature notes, according to people who were involved in the private conversations.
The developments come after China’s sixth-largest developer said in a Hong Kong exchange filing last Thursday night that it anticipates posting a net loss of 45 billion to 55 billion yuan (US$6.2bil to US$7.6bil), compared with earnings of 1.91 billion yuan in the first half of 2022.
In the statement last Saturday, 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 Holdings Co plunged last week after bondholders failed to receive coupon payments of two US dollar notes by an initial deadline, raising concern it will be the next property giant to default.
The company’s shares fell as much as 14% last Friday in Hong Kong before closing below HK$1 for the first time. — Bloomberg
