Country Garden Holdings Ltd.’s Fengming Marine residential development in Shanghai, China, on Tuesday, July 12, 2022.
Shen Qilai | Bloomberg | Getty Images
Country Garden, once China’s largest developer, is facing liquidation proceedings.
Real estate sales in China have fallen by nearly 50% over the past three years, government data shows, as the industry recovers from an unprecedented debt crisis that began in 2021.
Country GardenHowever, the company said it expects full-year losses in 2024 to narrow due to improved margins and lower administrative and selling expenses in line with previous regulations.
Due to the default of US$11 billion in overseas bonds at the end of 2023, the company postponed the release of its full-year 2023 and 2024 interim financial reports.
The developer said in a filing on Tuesday that the shares will remain suspended until further notice. It did not provide further details.
The company reported a net loss of 12.8 billion yuan ($1.75 billion) in the first six months of 2024, compared with a record net loss of 178.4 billion yuan for the full year of 2023. Loss or profit decline.
However, last year’s mid-term loss narrowed from the net loss of 48.9 billion yuan a year ago, while the full-year figure narrowed from the net loss of 6.1 billion yuan in 2022 and the net profit of 26.8 billion yuan in 2021.
As of the end of June last year, the company had interest-bearing liabilities of 250.2 billion yuan and cash and cash equivalents of 6.7 billion yuan.
The company said in a separate statement, “Due to the larger provision amount in 2023, the inventory requiring additional provisions has been significantly reduced; we expect the full-year loss in 2024 to narrow significantly.”
Inventory provisions were 2.7 billion yuan in the first six months of last year, compared with 82.4 billion yuan in the first 12 months.
Country Garden said that after delivering 1.7 million units to buyers in the past three years, it still has 200,000 apartments yet to be completed. As of June 2024, the company had 3,059 projects under development across the country.
liquidation application
A survey by real estate research institute CRIC showed that Country Garden’s annual sales fell by more than 70% last year, and its national ranking will drop from 7th to 16th by 2023. For this company that was once China’s largest by sales For developer companies, this number has dropped significantly.
The release of the financial report and the latest news on offshore debt restructuring released last week are related to Country Garden’s liquidation application filed with the Hong Kong court by creditors over Country Garden’s failure to pay a US$205 million loan.
Guangdong Province Country Garden said it had proposed a debt restructuring to creditors to reduce its overseas debt worth US$16.4 billion by 70% and had reached an “understanding” with lending groups.
The next liquidation hearing will be held on January 20.
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