Amid a grace period for the payment of dollar bond interest by Chinese real estate developer Country Garden, which is in a management crisis, there are concerns that Country Garden could fall into default (debt default) due to failure to pay bond interest.
According to U.S. economic media CNBC and Hong Kong’s South China Morning Post (SCMP), the 30-day grace period for the payment of 15.4 million dollars in dollar bonds will end from the 17th to the 18th.
The exact timing of the end of the grace period is not known. Earlier, Country Garden failed to pay interest on dollar bonds until the 17th of last month, the original deadline.
Last week, Country Garden said it would not be able to meet its obligations on time for all offshore debts, including U.S. dollar bonds.
Country Garden’s admission last week of the possibility of default signals that it has begun efforts to restructure some of its $16.5 billion offshore debt, the SCMP reported.
Recently, Country Garden reportedly appointed China International Capital Corporation (CICC), U.S. law firm Sidley Austin LLP, and U.S. investment bank Houlihan Lokey as advisers to evaluate capital structure and liquidity. In fact, it can be seen as a preparation for restructuring according to default.
Earlier in August, Country Garden failed to pay $22.5 million in interest on dollar bonds, putting it in a default crisis. At that time, Biguiyuan managed to avoid default by paying interest, but it is facing interest payments on other dollar bonds one after another.
Country Garden’s founder’s family reportedly offered the company $300 million worth of interest-free loans to pay off debts. Reuters also reported that the families of the founders are trying to sell their private jets to raise funds.
