Country Garden extends bondholders’ vote in last-ditch effort to avert default
- Country Garden’s bondholders will be able to vote on the company’s proposal to postpone its payments until 10pm today
- The decision to extend the vote was made at 9:30pm last night, 30 minutes before the deadline, Caixin reported
Country Garden Holdings extended the voting period by its bondholders to 10pm on September 1, giving them extra time to deliberate on the property developer’s plan to postpone its payments and avert a default on a private onshore bond.
The developer extended the vote at 9:30pm last night, 30 minutes before bondholders were due to cast their final electronic ballots, according to a report by Caixin. Country Garden did not immediately respond to requests for comment.
Country Garden, China’s largest developer by sales not long ago, last week proposed extending the payment of the interest and principal on a 3.9 billion yuan (US$535 million) note in seven phases over three years.
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But some bondholders did not accept this and requested full repayment, forcing Country Garden to delay the vote to 10pm Hong Kong time on Thursday from last Friday and seek the 40-day extension instead.
The initial plan put forward by Country Garden proposed that creditors wait until September 2026 to receive 44 per cent of their investment principal.
Holders of 10.5 per cent of the bonds had proposed declaring the developer in default, rejecting Country Garden’s appeal for postponement, according to people familiar with the matter.
The results of the vote came after the company posted a record loss of US$6.7 billion for the first half of the year on Wednesday and warned of a potential default. Its cash balance shrank by 21 per cent to 101.12 billion yuan from 123.48 billion yuan a year ago.
The developer has been trying to service its debt and avoid a default for nearly a month. For instance, on Wednesday it announced an equity financing project to raise about HK$270 million to offset payments it owes to another company.