Country Garden is in serious crisis: Chinese real estate giant cannot make payments again

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“The company has failed to make due payments of 470 million Hong Kong dollars (about 56.8 million euros) as part of its debt,” Country Garden said in a statement to the Hong Kong Stock Exchange on Tuesday. It is likely that no further payments will be made. The company, based in Foshan in southern China, had already missed payments last month.

With thousands of projects and nearly 70,000 employees, Country Garden is one of the largest real estate developers in China. The company is also one of the most indebted companies in the industry, with debt equivalent to around 180 billion euros. Another property developer with huge amounts of debt that has recently made headlines due to investigations into its board of directors is China Evergrande Group.

Sales collapsed

The real estate sector in the world’s second largest economy is experiencing a serious crisis due to the decrease in demand in the housing market. The government has already tried to curb this trend by offering tax breaks and loosening regulations on buying apartments in big cities.

Country Garden also said the group’s sales fell 43.9 per cent between January and September this year compared to the same period last year. In fact, the company made 80.7 percent less profit from sales in September compared to the same month last year.

Country Garden said it hired outside consultants to review the company’s finances and “formulate a holistic solution.” Observers saw this as the first important step in the restructuring of the group. Shares on the Hong Kong stock exchange were down more than four percent as of noon (local time). (SDA)

Source :Blick