China’s largest real estate developer, Country Garden, reported record loss in the first half of this year, and it is possible to default.
According to China’s Caijingwang on the 30th, Country Garden posted a net loss of 48.932 billion yuan in the first half of this year through a public announcement that evening.
“The funds available to the company have continued to decrease amid worsening sales and difficulties in the financing environment, and are currently under phased liquidity pressure,” Biguiyuan said in a public announcement.
The company’s performance is facing significant challenges due to the fall in the real estate market, and its reservation and sales performance has decreased significantly since April”There was no clear improvement in performance in the first half of the year,” he claimed.
The company also acknowledged that it did not take appropriate measures to cope with the real estate recession. In this regard, “Since 2021, there have been major changes in the external environment of the real estate industry, and the company has made some predictions in this regard, but the downturn has exceeded expectations”The company failed to come up with strong countermeasures and failed to respond to the biggest crisis since the company was established,” he said.
In particular, he said, “If the company’s financial situation continues to deteriorate, there is a possibility of default.” It then predicted that it would be able to fulfill its financial obligations over the next 12 months, considering the expected cash inflow and cost control.
Prior to this, Country Garden has failed to pay back $22.5 million in interest on two $1 billion bonds due on the 7th, and will fall into default if it fails to fulfill its debt obligations even during the 30-day grace period.
Country Garden formed a task force (TF) centered on co-chairman Yang Hui-yen to deal with the situation, but it is reported that it is difficult to determine whether he will escape the crisis as the liquidity situation worsens.
Fitch, an international credit rating agency, lowered the credit rating of Country Garden Service Holdings, a subsidiary of Country Garden Asset Management, by one notch from “BBB- (investment eligibility rating)” to “BB+ (speculation rating).” The rating outlook was also “negative.”
