China's Politburo ramped up efforts to revive growth with pledges to support fiscal spending and stabilise the beleaguered property sector. This gives new momentum to massive stimulus measures already announced, aimed at arresting a slowdown in the world's second-largest economy.

China's Politburo Calls for Measures to Stop Property Market Decline

Chinese property giant Country Garden has sounded the alarm about its inability to meet offshore debt obligations, raising concerns about the possibility of one of China's most significant debt restructurings. While the company has not yet defaulted, it has missed coupon payments on certain dollar bonds since last month and faces looming deadlines for payments.

According to a Reuters report, the largest private property developer in China, issued a statement to the Hong Kong stock exchange, stating that it is grappling with "significant challenges" in sales and financing, leading to a continuous decrease in available funds. The company acknowledged that it would be unable to meet all of its offshore payment obligations on time or within grace periods, potentially triggering creditor demands for payment acceleration or enforcement actions.

The warning from Country Garden underlines the severity of the liquidity crisis in China's property sector, which accounts for a significant portion of the country's economy. It also highlights the contrasting fortunes of property developers and households in the face of tighter monetary policies. Since the liquidity crisis hit the sector in 2021, approximately 40 per cent of Chinese home sales have been tied to private property developers who have defaulted on debt obligations, leaving many housing projects incomplete.

The ongoing challenges in the property sector have prompted Beijing to implement various measures to boost confidence among homebuyers. However, the mounting debt issues faced by developers are likely to continue casting a shadow on the sector's recovery.

Country Garden, with $10.96 billion in offshore bonds and 42.7 billion yuan ($5.86 billion) in offshore loans, is grappling with uncertainty regarding asset disposals and a cash squeeze. In response, the company has enlisted the services of financial advisers Houlihan Lokey, China International Capital Corporation (CICC), and law firm Sidley Austin to examine its capital structure and liquidity position and to devise a comprehensive solution.

"We do not expect Country Garden's liquidity to materially improve as homebuyers and financial institutions may continue to stay on the sidelines," Reuters quoted Morningstar analyst, Jeff Zhang. The next two weeks will be critical for the company as the outcome of overseas debt restructuring hangs in the balance.

Country Garden had been scheduled to make a $66.8 million coupon payment on its 2024 and 2026 dollar bonds, which includes a 30-day grace period. It remains unclear whether these payments were made. Additionally, the company failed to make a principal payment of HK$470 million ($60.04 million) on specific debts.

The coming week poses a significant test for the company, as its entire offshore debt could be classified as in default if it fails to make a $15 million September coupon payment by October 17, the end of the 30-day grace period.

Despite the challenges, the company received approval from onshore bondholders for the extension of nine series of bonds with an outstanding principal value of 14.7 billion yuan ($2.02 billion). This extension provides valuable time for the company to focus on recovering its business operations.

Country Garden's shares have been under significant pressure, losing over 10 per cent on Tuesday, marking a decline of nearly 70 per cent in value since the beginning of the year. The company appears to be adapting its business model, aiming to reduce its debt burden, rightsize its business, and accelerate asset sales.

&nbsp;(With inputs from Reuters)

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Chinese property giant Country Garden has sounded the alarm about its inability to meet offshore debt obligations, raising concerns about the possibility of one of China's most significant debt restructurings.

Chinese property giant Country Garden has sounded the alarm about its inability to meet offshore debt obligations, raising concerns about the possibility of one of China's most significant debt restructurings. While the company has not yet defaulted, it has missed coupon payments on certain dollar bonds since last month and faces looming deadlines for payments. According to a Reuters report, the largest private property developer in China, issued a statement to the Hong Kong stock exchange, stating that it is grappling with "significant challenges" in sales and financing, leading to a continuous decrease in available funds. The company acknowledged that it would be unable to meet all of its offshore payment obligations on time or within grace periods, potentially triggering creditor demands for payment acceleration or enforcement actions. The warning from Country Garden underlines the severity of the liquidity crisis in China's property sector, which accounts for a significant portion of the country's economy. It also highlights the contrasting fortunes of property developers and households in the face of tighter monetary policies. Since the liquidity crisis hit the sector in 2021, approximately 40 per cent of Chinese home sales have been tied to private property developers who have defaulted on debt obligations, leaving many housing projects incomplete. The ongoing challenges in the property sector have prompted Beijing to implement various measures to boost confidence among homebuyers. However, the mounting debt issues faced by developers are likely to continue casting a shadow on the sector's recovery. Country Garden, with $10.96 billion in offshore bonds and 42.7 billion yuan ($5.86 billion) in offshore loans, is grappling with uncertainty regarding asset disposals and a cash squeeze. In response, the company has enlisted the services of financial advisers Houlihan Lokey, China International Capital Corporation (CICC), and law firm Sidley Austin to examine its capital structure and liquidity position and to devise a comprehensive solution. "We do not expect Country Garden's liquidity to materially improve as homebuyers and financial institutions may continue to stay on the sidelines," Reuters quoted Morningstar analyst, Jeff Zhang. The next two weeks will be critical for the company as the outcome of overseas debt restructuring hangs in the balance. Country Garden had been scheduled to make a $66.8 million coupon payment on its 2024 and 2026 dollar bonds, which includes a 30-day grace period. It remains unclear whether these payments were made. Additionally, the company failed to make a principal payment of HK$470 million ($60.04 million) on specific debts. The coming week poses a significant test for the company, as its entire offshore debt could be classified as in default if it fails to make a $15 million September coupon payment by October 17, the end of the 30-day grace period. Despite the challenges, the company received approval from onshore bondholders for the extension of nine series of bonds with an outstanding principal value of 14.7 billion yuan ($2.02 billion). This extension provides valuable time for the company to focus on recovering its business operations. Country Garden's shares have been under significant pressure, losing over 10 per cent on Tuesday, marking a decline of nearly 70 per cent in value since the beginning of the year. The company appears to be adapting its business model, aiming to reduce its debt burden, rightsize its business, and accelerate asset sales. (With inputs from Reuters) WATCH WION LIVE HERE

Country Garden faces offshore debt crisis: Potential for one of China's biggest restructurings

Evergrande, the property giant in China, on Monday (July 17) reported that it suffered a loss of USD 96 billion in the year 2021. It also reported USD 135 in liabilities. The company has released its long-delayed results.

The loss showed "the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern," Evergrande said in a stock exchange filing.

Evergrande, once China's largest real estate company, was found in 2021 to be drowning in more than USD 300 billion in liabilities. This has sparked a nationwide property crisis. The amount of money involved made the crisis capable of having global economic ramifications. Trading in Evergrande's Hong Kong-listed shares has been suspended since March 2022.&nbsp;

In the same month, Evergrande said that it won't be able to publish its 2021 audited results within the timeframe required by Hong Kong's listing rules. It blamed the delay on "a large number of additional audit procedures" and the COVID-19 pandemic.

Watch | China: Youth unemployment at record high, economy shows signs of weakness | All you need to know

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On Monday, the company said that the net loss it suffered amounted to 686.22 billion yuan (USD 95.7 billion) in 2021. The latest filing in the Hong Kong stock exchange may bring Evergrande close to a resumption of trading.&nbsp;

<h2>Is Evergrande still struggling?</h2>

On Monday, the company released unaudited results for the first half of 2022 as well. These showed that the group's total liabilities had grown to 2.47 trillion yuan by June 2022. This is being considered a sign that Evergrande is still not completely out of troubled waters.

This year, Evergrande announced a long-awaited restructuring proposal. It offered creditors a choice to swap their debt into new notes issued by the company and equities in two subsidiaries, Evergrande Property Services Group and Evergrande New Energy Vehicle Group.

"The respective restructuring effective date is anticipated to be 1 October 2023 and the longstop date is 15 December 2023," Evergrande said on Monday.

<h2>Property sector in turmoil</h2>

The property sector in China is still in turmoil. Major developers, including Evergrande, have been observed to be unable to complete housing projects. This has triggered protests and mortgage boycotts from homebuyers.&nbsp;

Evergrande has become symbolic of a broader crisis in China's property sector. This sector accounts for around a quarter of the country's gross domestic product.

Also Read | <a href="https://www.wionews.com/world/where-is-qin-gang-chinese-foreign-minister-was-last-seen-over-three-weeks-ago-616546">Where is Qin Gang? Chinese foreign minister was last seen over three weeks ago</a>

Smaller firms have defaulted on loans or had problems raising cash since the government brought in stricter lending curbs in 2020.

In November, China's banking regulator and central bank unveiled new measures to promote the "stable and healthy development" of the real estate industry.

They include credit support for indebted developers, financial support to ensure projects are completed and assistance for deferred-payment loans for homebuyers.

(With inputs from agencies)

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Evergrande, the property giant in China, on Monday (July 17) reported that it suffered a loss of USD 96 billion in the year 2021. It also reported USD 135 in liabilities.

Evergrande, the property giant in China, on Monday (July 17) reported that it suffered a loss of USD 96 billion in the year 2021. It also reported USD 135 in liabilities. The company has released its long-delayed results. The loss showed "the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern," Evergrande said in a stock exchange filing. Evergrande, once China's largest real estate company, was found in 2021 to be drowning in more than USD 300 billion in liabilities. This has sparked a nationwide property crisis. The amount of money involved made the crisis capable of having global economic ramifications. Trading in Evergrande's Hong Kong-listed shares has been suspended since March 2022. In the same month, Evergrande said that it won't be able to publish its 2021 audited results within the timeframe required by Hong Kong's listing rules. It blamed the delay on "a large number of additional audit procedures" and the COVID-19 pandemic. Watch | China: Youth unemployment at record high, economy shows signs of weakness | All you need to know × On Monday, the company said that the net loss it suffered amounted to 686.22 billion yuan (USD 95.7 billion) in 2021. The latest filing in the Hong Kong stock exchange may bring Evergrande close to a resumption of trading. Is Evergrande still struggling? On Monday, the company released unaudited results for the first half of 2022 as well. These showed that the group's total liabilities had grown to 2.47 trillion yuan by June 2022. This is being considered a sign that Evergrande is still not completely out of troubled waters. This year, Evergrande announced a long-awaited restructuring proposal. It offered creditors a choice to swap their debt into new notes issued by the company and equities in two subsidiaries, Evergrande Property Services Group and Evergrande New Energy Vehicle Group. "The respective restructuring effective date is anticipated to be 1 October 2023 and the longstop date is 15 December 2023," Evergrande said on Monday. Property sector in turmoil The property sector in China is still in turmoil. Major developers, including Evergrande, have been observed to be unable to complete housing projects. This has triggered protests and mortgage boycotts from homebuyers. Evergrande has become symbolic of a broader crisis in China's property sector. This sector accounts for around a quarter of the country's gross domestic product. Also Read | Where is Qin Gang? Chinese foreign minister was last seen over three weeks ago Smaller firms have defaulted on loans or had problems raising cash since the government brought in stricter lending curbs in 2020. In November, China's banking regulator and central bank unveiled new measures to promote the "stable and healthy development" of the real estate industry. They include credit support for indebted developers, financial support to ensure projects are completed and assistance for deferred-payment loans for homebuyers. (With inputs from agencies) You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Evergrande, China's troubled property giant, reports $96 billion loss

Chinese authorities have unveiled sweeping measures to rescue the country's struggling property sector, as regulators seek to offset years of harsh pandemic curbs and a real estate crackdown that have stalled the world's number-two economy.

The banking regulator and central bank on Friday issued a 16-point set of internal directives to promote the "stable and healthy development" of the industry, which were reported by Chinese state media on Monday.

The measures include credit support for debt-laden housing developers, financial support to ensure the completion and handover of projects to homeowners, and assistance for deferred-payment loans for homebuyers.

That came on the same day the National Health Commission issued 20 rules for "optimising" China's zero-Covid policy, where certain restrictions were relaxed to limit its social and economic impact.

"We view this as the most crucial pivot since Beijing significantly tightened financing of the property sector," Ting Lu, chief China economist at Nomura, said in a note.

"We believe these measures demonstrate that Beijing is willing to reverse most of its financial tightening measures."

Hong Kong stocks surged more than three per cent Monday after the measures were unveiled, extending Friday's more than seven per cent rally before paring gains to 1.7 per cent at the close.

The Hong Kong-listed shares of China's biggest developer by sales, Country Garden, closed up 45 per cent while the shares of major competitor Greenland gained more than 35 per cent.

'Not a bailout'

Beijing imposed widespread lending curbs on property developers in 2020, which exacerbated their liquidity issues and caused several of the largest to default on bond payments.

The knock-on effects on the massive real estate sector were severe, with cash-strapped developer Evergrande -- China's largest -- and others failing to complete projects, sparking mortgage boycotts and protests from homebuyers.

The measures emphasised "guaranteeing the handover of buildings", and ordered development banks to provide "special loans" for the purpose, according to a copy circulating online.

Chinese authorities have unveiled sweeping measures to rescue the country's struggling property sector, as regulators seek to offset years of harsh pandemic curbs and a real estate crackdown that have stalled the world's number-two economy.

Chinese authorities have unveiled sweeping measures to rescue the country's struggling property sector, as regulators seek to offset years of harsh pandemic curbs and a real estate crackdown that have stalled the world's number-two economy. The banking regulator and central bank on Friday issued a 16-point set of internal directives to promote the "stable and healthy development" of the industry, which were reported by Chinese state media on Monday. The measures include credit support for debt-laden housing developers, financial support to ensure the completion and handover of projects to homeowners, and assistance for deferred-payment loans for homebuyers. That came on the same day the National Health Commission issued 20 rules for "optimising" China's zero-Covid policy, where certain restrictions were relaxed to limit its social and economic impact. "We view this as the most crucial pivot since Beijing significantly tightened financing of the property sector," Ting Lu, chief China economist at Nomura, said in a note. "We believe these measures demonstrate that Beijing is willing to reverse most of its financial tightening measures." Hong Kong stocks surged more than three per cent Monday after the measures were unveiled, extending Friday's more than seven per cent rally before paring gains to 1.7 per cent at the close. The Hong Kong-listed shares of China's biggest developer by sales, Country Garden, closed up 45 per cent while the shares of major competitor Greenland gained more than 35 per cent. 'Not a bailout' Beijing imposed widespread lending curbs on property developers in 2020, which exacerbated their liquidity issues and caused several of the largest to default on bond payments. The knock-on effects on the massive real estate sector were severe, with cash-strapped developer Evergrande -- China's largest -- and others failing to complete projects, sparking mortgage boycotts and protests from homebuyers. The measures emphasised "guaranteeing the handover of buildings", and ordered development banks to provide "special loans" for the purpose, according to a copy circulating online.

China unveils sweeping measures to rescue property sector

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