(Beijing) Country Garden, one of China’s biggest debt-ridden property developers, has extended the deadline until next week for its creditors to vote on a rescheduling of its repayments, which would allow it to avoid a default with catastrophic consequences for the world’s second largest economy, according to the Bloomberg agency on Friday.
The group, long deemed financially sound, was unable earlier this month to repay two interest on loans, at a time when the real estate sector is experiencing an unprecedented crisis in China.
Country Garden formally risks a payment default if it does not pay these sums, after a grace period of 30 days which expires at the beginning of September.
To add to the difficulties, he must also pay a bond for a total amount of 3.9 billion yuan, which matures in ten days.
The promoter, who hopes to postpone this deadline to 2026, has been talking to creditors since Wednesday.
The latter originally had until 10 p.m. Friday (10 a.m. Eastern Time) to vote in an online vote, according to Bloomberg. But still according to Bloomberg, which cites a document submitted to the Shanghai Stock Exchange, the group finally postponed the deadline for the vote to August 31.
A deal would see Country Garden avoid a default, which would be the biggest in China since that of rival Evergrande two years ago.
The situation of Country Garden agitates the markets, because the group had a considerable debt at the end of 2022 which it estimated at some 1.152 billion yuan.
Bloomberg puts it at around 1.4 trillion yuan.
Country Garden employs tens of thousands of people and is listed on the Forbes list of the 500 largest companies in the world. Her boss, Yang Huiyan, was until recently the richest woman in Asia.
The setbacks of the two real estate giants are further weakening a sector already scalded by the health crisis and the economic slowdown in China.
To revive this key sector of the economy, China announced new mortgage easing measures on Friday.
