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May 22, 2024
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Country Garden: China property giant faces liquidation petition

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China’s biggest private property developer Country Garden is facing a liquidation petition, which has been filed in Hong Kong by a creditor.

The firm, which defaulted on its overseas debt in October, says it will “resolutely oppose” the legal case.

Last month, rival real estate giant China Evergrande was ordered to liquidate by a Hong Kong court.

Country Garden said the petition was filed by Ever Credit Ltd, with the first date for hearing set for 17 May. Ever Credit is a unit of Kingboard Holdings, a laminates maker and property investor.

Shares in Country Garden fell more than 10% in early Hong Kong trade following the announcement.

Country Garden did not immediately respond to a BBC request for comment.

It comes a month after Evergrande, the world’s most indebted property developer, was ordered to be liquidated by a Hong Kong court.

The firm has been the poster child of China’s real estate crisis with more than $300bn (£236bn) of debt.

Liquidators have been appointed to look at Evergrande’s overall financial position and identify potential restructuring strategies.

That could include seizing and selling off assets, so that the proceeds can be used to repay outstanding debts.

However, the Chinese government may be reluctant to see work halt on property developments in China, where many ordinary would-be homeowners are waiting for apartments they have already paid for.

Problems in China’s property market are having a major impact as the sector accounts for a third of the economy.

The industry has been facing a major financial squeeze since 2021, when authorities introduced measures to curb the amount big real estate companies could borrow.

Since then several large property developers have defaulted on their debts in the last few years.

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