Country Garden: Troubled Chinese property developer faces liquidation petition

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CNN
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Chinese language property developer Nation Backyard, which defaulted on its debt final yr, says it has acquired a liquidation petition from a creditor after not repaying a mortgage.

The winding-up petition was filed by Ever Credit score Restricted, which had lent Nation Backyard a time period mortgage facility value 1.6 billion Hong Kong {dollars} ($204.5 million), the developer stated in a Wednesday stock exchange filing.

The information, which despatched shares within the developer falling by greater than 12%, comes only a month after rival property agency Evergrande was ordered to liquidate by a Hong Kong court docket in a landmark ruling.

The order got here after the embattled Evergrande, as soon as the nation’s second largest homebuilder, and its abroad collectors had didn’t agree on the right way to restructure the corporate’s huge debt throughout talks that lasted 19 months.

There are nonetheless questions on how the collapse of Evergrande, the poster youngster of China’s actual property disaster, will have an effect on buyers, hundreds of staff and homebuyers ready for his or her flats.

As for Nation Backyard, it stated within the submitting it could “vigorously” oppose the liquidation petition, which was filed at Hong Kong’s Excessive Courtroom on Tuesday. A court docket listening to has been set for Might 17, it added.

Final October, a panel of worldwide banks and buyers overseeing the credit score default swaps market declared that the developer had defaulted on its debt after failing to make a bond compensation by a remaining deadline that month.

Previously China’s largest homebuilder, Nation Backyard missed the cost on a $500 million bond because it battled a liquidity disaster. The corporate had previously warned buyers that it may default on its offshore debt, after reporting a deepening plunge in its gross sales.

China’s economic system has been hobbled by a real estate downturn since 2021, when a authorities crackdown on builders’ borrowing triggered a liquidity disaster within the sector.

Final week, the nation’s central financial institution minimize its key mortgage reference fee by a file quantity, because it ramped up efforts to stem the extended disaster, which is marked by an ongoing decline in each funding in and gross sales of property. Dozens of main builders have defaulted on their debt.