(Bloomberg) -- Country Garden Holdings Co. told some investors that it is considering further extending payments on some of its yuan bonds, according to people familiar with the matter, as a prolonged sales slump adds to the Chinese developer’s financial stress.
In an effort to gain more time to map out a debt overhaul, Country Garden’s main onshore unit may push back payments on several yuan bonds due in September by six months, the people said, citing private conversations. That would include 10% of the principal on its 4.38% notes due September 2026, the people added.
Bondholders’ approval would be needed for the delays.
Some of these payments due next month were already pushed back in April, after the builder first extended the notes last year.
The potential payment delays would be a fresh setback for onshore bondholders, who are waiting to recoup part of their losses. It also underscores the liquidity stress that some of China’s biggest builders still face as the nation’s property crisis drags into its fourth year.
Country Garden said that it would make arrangements on principal and interest payments according to its funding situation and would make a disclosure in September.
Like many of its peers, Country Garden’s sales continue to slide. Contracted sales for July dropped 72% from a year earlier to 3.41 billion yuan ($479 million), following a 73% decline in June.
Country Garden got a six-month respite for its offshore restructuring talks last month after its liquidation hearing in Hong Kong was adjourned until late January. The company said at the time that it expected key creditor groups to agree on a debt term sheet by the end of September.
--With assistance from Emma Dong.
©2024 Bloomberg L.P.
