Country Garden shares hit record low on loss forecast, restructuring fears
By Clare Jim
HONG KONG (Reuters) -Shares of China's largest private property developer Country Garden plunged to a record low on Friday after it forecast a first-half loss of up to $7.6 billion and a media report said it was preparing for a debt restructuring.
The firm, which had total liabilities of about $194 billion at the end of 2022 and large exposure to lower-tier cities, is expected to kick off a restructuring process soon, Chinese news outlet Yicai said.
China International Capital Corporation (CICC) has been hired as a financial adviser to lead the restructuring, the report added.
Country Garden declined to comment. CICC did not immediately respond to a request for comment.
Country Garden told Reuters this week that it had not been able to make $22 million of dollar coupon payments on time, though both have 30-day grace periods.
The missed payments triggered a sell-off in its shares and bonds and deepened contagion worries in a sector that accounts for a quarter of China's economy but has already seen many company defaults since late 2021.
The shares shed as much as 14.4% on Friday morning to a record low of HK$0.89 ($0.1139), having lost 38% of their value so far this week.
Most of its dollar bonds traded at a record low below 7 cents on the dollar, further down from 8 cents on Tuesday after it missed the two coupon payments.
The firm's onshore notes including two bonds due in 2025 trading in Shanghai dropped more than 11%.
Country Garden forecast the large first-half loss in filings on Thursday, and said that it would take measures to meet its debt obligations and fix operational issues to get the company back on track.
Ratings agency Moody's (NYSE:MCO) on Thursday downgraded Country Garden's corporate
Read more on investing.com
