April 23, 2024

China property crisis: Country Garden woes deepen

STORY: China’s property crisis has taken another turn for the worse.

Giant developer Country Garden is the latest to face a liquidation petition.

The firm revealed the news Wednesday.

It said the petition was filed by creditors over non-payment of a loan worth $205 million.

Country Garden says it will resolutely oppose the move, with a court date set for May 17.

But the petition will revive concern among homebuyers and investors over the country’s ailing property sector.

It comes just a month after bigger rival Evergrande was ordered to liquidate by a Hong Kong court.

A string of other developers have also defaulted on their debt payments.

The sector has lurched from one crisis to another since 2021, when regulators cracked down on the massive debts being piled up at property firms.

Now it’s all a growing headache for Beijing, with real estate accounting for around a quarter of China’s economy.

Country Garden says it will continue to work with creditors on a restructuring plan.

In October it missed a $15 million debt payment, prompting groups of bondholders to start organising action against the firm.

One investor told Reuters the company had messed around and wasted time ever since – and said it was no surprise if some creditors had now run out of patience.

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