The largest private real estate developer in China is facing a liquidation petition in a Hong Kong court, marking a further escalation in the country’s real estate crisis, which is affecting the world’s second-largest economy.
Country Garden has accumulated over £150 billion in debt amid a property market downturn, with economists indicating that the bubble has burst due to diminishing buyer interest.
The crisis in China’s property sector intensifies as Moody’s pulls back its credit ratings.
A lender has recently filed a petition for approximately 1.6 billion Hong Kong dollars (£161 million) in repayment. This follows a similar action taken against Evergrande, another major developer, by the city’s high court. Evergrande is struggling with debts exceeding $300 billion (£237 billion).
In a surprising move last week, Moody’s withdrew credit ratings for 10 Chinese property developers, citing “business reasons”.
In response, Country Garden announced in a statement to the Hong Kong Exchange its intention to robustly contest the petition.
The company emphasized its ongoing efforts to proactively engage with offshore creditors regarding its restructuring plan, aiming to announce terms to the market as soon as possible.
