Exclusive-Country Garden lenders' group hires advisers for debt revamp talks, sources say
By Scott Murdoch and Clare Jim
SYDNEY/HONG KONG (Reuters) -A group of lenders to China's Country Garden has hired Allen & Overy and Deloitte as advisers, three sources with knowledge of the matter said, as creditors to the embattled developer gear up for possible debt restructuring talks.
The hiring by the lenders' group comes as the Foshan-based developer, China's top private property company by sales, prepares to face a Hong Kong court on May 17 after a creditor filed a liquidation petition against it.
The lenders' group has about $4 billion worth of credit exposure to Country Garden, two of the people said. The group includes Bank of China and China Construction Bank (OTC:CICHF), one of them added.
Country Garden's debt revamp process started in recent weeks with the hiring of advisers by the developer and a so-called ad-hoc offshore bondholders' group, after it missed a $15 million bond coupon repayment last October.
Country Garden has total liabilities of $200 billion. That includes $11 billion offshore debt now deemed to be in default.
The people did not want to be named as the information is confidential. Deloitte and Allen & Overy declined to comment.
Country Garden, Bank of China and China Construction Bank did not immediately respond to a request for comment.
Country Garden's financial trouble has worsened China's property sector debt crisis that started in 2021 after a regulatory crackdown on debt-fuelled construction triggered a liquidity squeeze.
Several developers, including China Evergrande (HK:3333) Group, have defaulted on billions of dollars of debt since then, and have either launched or are in the process of starting debt restructuring processes to avoid facing bankruptcy or liquidation proceedings.
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