(Bloomberg) -- Chinese developer Country Garden Holdings Co. is in talks with Houlihan Lokey Inc. and China International Capital Corp. for both to become financial advisers and put together an offshore-debt restructuring plan, according to people familiar with the matter.

No contract has been signed, said the people, who asked not to be identified as the matter is private. Country Garden, the country’s former biggest builder, didn’t offer a comment when reached Wednesday. Houlihan and CICC declined to comment. Discussions are at a preliminary stage and there’s no guarantee a debt plan would emerge.

Country Garden, which has $11 billion of offshore bonds outstanding according to Bloomberg-compiled data, has become the face of China’s broader property debt crisis. It recently won investor approval to extend payments on 14.8 billion yuan ($2 billion) of onshore notes and has a series of near-term payment obligations on other notes after narrowly averting default earlier this month. 

Due Wednesday from Country Garden were two offshore bond interest payments — $40 million for a note maturing in January and 7.81 million ringgit ($1.66 million) on a Malaysian security maturing in 2025, according to data compiled by Bloomberg. The payments have respective grace periods of 30 and five days.

Any payment failures could send fresh shockwaves through the country’s property market that authorities have been trying to stabilize amid a years-long debt crisis. Sentiment has already been shaken further in recent days after a long-awaited debt restructuring by peer China Evergrande Group screeched to a halt.

While Country Garden has so far avoided defaulting, investors remain doubtful about its ability to survive China’s real estate crisis that shows no signs of abating. Last week, the company missed an initial deadline to pay $15.4 million of interest on an offshore note.

Most of the company’s dollar bonds have slid to deeply distressed levels of between 6 cents and 10 cents after some were near 80 cents in June. 

The developer’s operations are focused in smaller cities, which expanded faster in good times but have been harder hit by the housing slump and economic slowdown than top-tier cities such as Beijing and Shanghai. 

“China still has policy tools in reserve to stabilize residential sales in the country’s largest cities,” said S&P Global Ratings analysts Iris Cheng and Edward Chan in a research report published on Sept. 25. “We do not expect lower-tier cities will get the same support as in the last big downturn.”

Country Garden’s contracted sales plunged 72% from a year earlier in August, worsening after declines in previous months and warned about “major uncertainties” regarding its ability to repay its debt.

--With assistance from Dorothy Ma, Dong Cao and Emma Dong.

©2023 Bloomberg L.P.