Justice Lawrence Yip Sue Pui on Friday adjourned the case to June 11 after hearing a litigation by Ever Credit Ltd, a unit of Hong Kong-listed laminates and chemicals producer Kingboard Holdings. Today’s hearing was the first since Ever Credit filed in February to liquidate the firm to recover a HK$1.6 billion in loan and accrued interest.
Country Garden had 1.36 trillion yuan (US$189 billion) in total liabilities on June 30, 2023, according to its latest published accounts. They included 258 billion yuan of bonds and bank borrowings. The developer did not file its annual 2023 report by April 30 under the city’s stock exchange listing rules.
Kingboard suffered a 44 per cent drop in earnings last year, citing provision for credit losses tied to a loan to Country Garden, among others, according to its exchange filing in March.
Country Garden, based in Foshan in southern Guangdong province and once China’s top home builder by sales, is facing mounting pressures to meet its obligations. It earlier defaulted on a dollar-denominated bond in October, forcing offshore creditors into talks to reorganise their debts. Last week, it paid about 66 million yuan of interest on two onshore bonds, within a grace period.
Officials from the ministry of housing and urban-rural development, the ministry of natural resources and the central bank, were due to meet in Beijing on late Friday to unveil more measures to shore up the housing market, with a special focus on supporting policies to ensure home delivery.
Despite recent state and local government efforts to shore up new home sales, a turnaround in the industry remains elusive amid weak confidence among homebuyers. Country Garden’s contracted sales slumped 83 per cent in April to 3.85 billion yuan from a year earlier, it said in a filing on May 3.
Its woes mirror the broader market slump. Sales by the top 100 Chinese developers tumbled 45 per cent in April to 312 billion yuan from a year earlier, according to China Real Estate Information Corp.
Chairwoman Yang Huiyan, still among China’s richest businesswomen, called on its employees to pull through these difficult times, saying the group would overcome the crisis with Beijing’s latest supportive measures, according to a post on its official WeChat social media account on Monday.
Its shares, last traded at HK$0.49, have been suspended from trading in Hong Kong since late March after failing to publish its 2023 accounts in time. They have lost 72 per cent in value over the past 12 months.