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Real Estate

Shares in Chinese property giant Country Garden down sharply

Agence France-Presse
Shares in Chinese property giant Country Garden down sharply
This picture taken on April 7, 2023 shows residential buildings and apartments in Guangzhou in China's southeastern Guangdong Province.
AFP / Ludovic Marin

BEIJING, China — Shares in Chinese property giant Country Garden plunged on Monday after it missed bond payments and warned of multibillion-dollar losses, deepening concerns over the nation's heavily indebted real estate sector.

Its stock price was down by more than 16 percent at 11 am in Hong Kong (0300 GMT).

Country Garden is a privately owned real estate giant named in Forbes' list of the 500 largest companies in the world. Its boss, Yang Huiyan, was until recently one of the richest women in Asia.

The firm has long been deemed financially solid but was unable last Monday to make two bond payments, and after a 30-day grace period the company risks defaulting in September if it still cannot pay.

Country Garden announced over the weekend it would suspend trading of onshore bonds from Monday, a decision likely to cause concern in the markets as the company's total debt was estimated at some 1.15 trillion yuan ($159 billion) at the end of 2022.

Like Evergrande, its heavily indebted competitor, any collapse of Country Garden would have catastrophic repercussions for the Chinese financial system and economy.

Adding to the pressure, 31 billion yuan ($4.27 billion) in the firm's bonds are set to mature in 2024, according to rating agency Moody's, which last Thursday downgraded its rating for the group to "Caa2", indicating "very high credit risk".

The group said in early August that it expected a net loss for the first half of this year totalling 45 billion to 55 billion yuan (about $6.2 billion to $7.6 billion).

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CHINA ECONOMY

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