Chinese property developer Country Garden denies talk its founder and chairman have left China, says they are ‘working as normal’
- Country Garden says its founder, Yeung Kwok-keung, and its chairman Yang Huiyan, are still “working as normal” in China, denies talk of their departure
- Debt stricken property developer says it has the right to “pursue responsibility for malicious rumour mongering”
Embattled property developer Country Garden issued a statement on Thursday morning rejecting talk, which it said was spread across several social media platforms, that its founder and chairman had both left China.
The company said the talk has had “adverse effects”, adding that its founder, Yeung Kwok-keung or Yang Guoqiang in Mandarin, and his daughter Yang Huiyan, who is also the company’s chairman are still “working as normal” in China.
Country Garden, once the largest Chinese home builder by sales, also said it reserves the right to “pursue responsibility for malicious rumour mongering”.
The news comes as the Chinese property developer, on Wednesday, reportedly missed US$15 million in coupon payments without explanation, triggering concerns that the group could face its first-ever default on its offshore debt, which could lead to one of China’s largest corporate restructurings at a time when the country’s property crisis is escalating.
Country Garden did not confirm if it had failed to meet its US$15 million offshore debt obligations, but said it is seeking a “holistic” solution to its challenges. Last week, it warned it would not be able to service all of its offshore borrowings on time.
“Due to deep readjustments within China’s property sector, the company’s sales are under constant pressure,” a Country Garden spokeswoman said in a text message. “As stated in a previous notice, the company expects to be unable to fulfil all of its offshore debt obligations, and is seeking a holistic solution to address its challenges, and only when the company maintains a going concern status, can we restore the most value to stakeholders.”
Country Garden founder inspects building site amid apparent Beijing scrutiny
The spokeswoman said the Foshan-based company has hired professionals for making evaluation studies. China International Capital Corp and Houlihan Lokey have been picked as joint financial advisers, and Sidley Austin was hired as a legal adviser to evaluate its capital structure and liquidity.
“Based on the principle of fairness and justice, and based on what’s feasible, we will propose a solution, which we will communicate in a timely manner to ensure the rights and interests of all parties concerned,” the spokeswoman said.
Moody’s Investors Service, which had downgraded Country Garden’s senior unsecured rating to C in August, said in a statement on Thursday that it was “already at the lowest of our rating scale”.
“Its corporate family rating (CFR) is currently at Ca,” according to the statement. “We could downgrade its CFR if recovery prospects for its creditors weaken further. An upgrade is unlikely, given the negative rating outlook.”
Country Garden founder Yeung recently showed up in public during a site inspection in Guangdong’s Shunde city, where he urged workers to ensure construction quality, according to a statement issued by the company last Friday.
Country Garden has an estimated 118.5 billion yuan of non-yuan debt. Around US$557.5 million of offshore interest and principal maturities and around US$1.75 billion of onshore bond maturities will fall due by the end of this year, according to research company CreditSights.
