Country Garden's lenders have agreed to delay payments on large loans to avoid a possible default, Bloomberg reported Saturday.
The result is significant for Land Garden, which so far has a strong financial reputation and was China's largest real estate company by revenue last year.
- What to choose? -
The bond issue of 3.9 billion yuan ($535 million) is due on Saturday.
However, according to Bloomberg, Bonds prefers to extend the group's financial recovery until 2026.
Country Garden has amassed massive debt, expected to reach 1.43 trillion yuan ($196 billion) by the end of 2022.
The group, which posted a record loss in the first half of this year, said on Wednesday it was "doing everything in its power" to pay down its debt but could not avoid a loss.
- Is the company qualified? -
As the next term approaches, the national park is still undecided.
In early August, the company made two interest payments on a $22.5 million loan.
A 30-day grace period was granted, which ends next week.
The Company still bears the risk of loss on these payments.
- Game Mode -
According to Country Garden, 96 percent of cash flow comes from property sales.
But China's real estate market is weakening. prices fall and buyers are reluctant to invest as the overall economy stagnates.
Many real estate giants have no choice but to sell at a discount.
The situation of residential parks is very dangerous because 60 percent of the projects are in small cities in China, where real estate prices are very difficult and domestic customers have relatively low purchasing power.
The company said it had 147.9 billion yuan ($20.3 billion) in cash at the end of June.
- A wider threat.
Country Garden has four times as many projects as rival Evergrande, which it rejected in 2021, prompting protests and a monthly wage strike that shut down construction sites.
Any halt to construction risks social unrest in China, where homeowners often pay for properties before the ground is broken.
Like Evergrande, which has more than $300 billion in debt, the collapse of Country Garden would be devastating to China's financial system and economy as a whole.
Headquartered in the southern city of Foshan, Country Garden employed about 58,140 "full-time" workers, according to comparable employment data.
- The light at the end of the tunnel? -
Chinese authorities have taken steps in recent days to increase support for real estate, which accounts for a quarter of the country's gross domestic product.
The central bank announced Thursday that it will cut mortgage rates for first-time buyers from September 25.
And some major cities, including Beijing and Shanghai, are relaxing mortgage laws to boost demand.
However, that may not be enough to boost the real estate market, said Societe Generale economist Michel Lam.
He said that they will continue to "trust" the buyers with the ongoing problems of the developers.
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