(Bloomberg) -- Chinese builder Country Garden Holdings Co.’s liquidation hearing in Hong Kong was adjourned until late January to give it more time to work on an offshore debt restructuring plan.
The company expects key creditor groups to agree on a debt term sheet by the end of September, its legal representative said Monday. It also plans to make the restructuring support agreement publicly available to all creditors by October, with documentation to sanction the plan to be filed by early 2025. Country Garden is scheduled to return to court on Jan. 20, according to Hong Kong’s judiciary website.
The Monday court hearing was the latest in the company’s legal wrangling with creditors after Ever Credit Ltd., a unit of laminates maker Kingboard Holdings Ltd., filed a winding-up petition against it in February.
The main purpose of a wind-up petition is to speed up the debt-restructuring process by forcing the defaulted company to come up with a repayment plan through negotiations with creditors. The builder said last month that work on its restructuring was continuing and that it had regularly addressed due diligence requests from bank creditors and a key group of bondholders.
Country Garden, once China’s largest developer by sales, continues to struggle amid a prolonged property crisis in the world’s second-largest economy. In June, the company’s contracted sales plunged 73% to 4.3 billion yuan ($593 million) from a year earlier, according to an exchange filing.
After defaulting on dollar bonds last year, the distressed real estate giant in May made interest payments for two bonds within a grace period after missing an initial deadline earlier. The move averted a potential test of a Chinese program to backstop distressed developers’ debt.
Country Garden has become one of the biggest casualties of China’s real estate crisis, with 1.36 trillion yuan of total liabilities, according to its unaudited 2023 interim results. The Foshan-based developer suspended trade in its shares in the Hong Kong market in March after postponing the publication of its annual report.
(Updates throughout with latest developments)
©2024 Bloomberg L.P.
