This article is from the Australian Property Journal archive
CHINESE development giant Country Garden, which recently missed payments on a dollar bond for the first time, has made it to a list drawn up by Beijing of 50 developers that will be eligible for a range of financing support.
Bloomberg, citing people familiar with the matter, reported that other developers to have made the so-called white list include CIFI Holdings Group, which has also missed debt payments, and Sino-Ocean Group.
Regulators are expected to finalise the list and distribute it to banks and other financial institutions in the coming days.
Beijing is looking to support the struggling property industry through loans, debt and equity financing, although the size of the funding and long-term implications for creditors and shareholders are currently unclear.
China’s property crisis has hit a large number of major developers since Evergrande Group defaulted on debts two years ago following Beijing’s “three red lines” crackdown on the amount large developers could borrow.
The result has been a number of other developers defaulting on their debts, leaving countless homes across the country unfinished, while people who have purchased their homes off-the-plan have been refusing to make mortgage payments.
Country Garden deemed to be in default on a dollar bond for the first time late last month after it failed to pay the US$15.4 million interest on a US$500 million note due in 2025. The event “constitutes an event of default,” according to a notice to holders from trustee Citicorp International seen by Bloomberg.
Country Garden had said it expects it will “not be able to meet all of its offshore payment obligations when due or within the relevant grace periods”, its sales were “under remarkable pressure”, and available funds had declined further. It posted a US$6.72 billion first-half loss, and last month its biggest sales drop in six years, and it now has US$200 billion in liabilities.
The company, which trades locally as Risland Australia, furthered its Australian asset sell-down in October with the divestment of Melbourne estate Windermere for a reported near-$250 million. It is also looking to offload the $2 billion Wilton Greens estate in Wollondilly Shire, south west of Sydney.
