
New Delhi:
Country Garden, once China’s largest property developer, is now bankrupt. The government machinery of the country is trying to save the company. Country Garden on Tuesday reported a loss of $24.3 billion in deferred financial results for 2023. This figure increases from the $825 million loss recorded in 2022 as China’s real estate sector declined. The company also said that according to interim results, it has suffered a loss of $1.8 billion in the first half of 2024.
- Country Garden was “facing serious challenges such as declining sales rates and credit crunch in the market”, the company wrote in its filing. “Guaranteeing delivery is our top priority.”
- The property giant had not reported full-year financial results since it ran into financial difficulties in late 2023, leaving it with debt of about $190 billion.
- It suspended trading in its Hong Kong stock in April 2024 and faces a winding-up hearing on January 20 related to non-payment of a $205 million loan.
- The Guangdong province-based company said last week it had proposed a debt restructuring plan that would cut its offshore debt by $11.6 billion.
China’s property sector experienced spectacular growth for the past two decades, before the credit crunch and housing downturn in recent years put many developers in financial trouble. Evergrande, another real estate giant, was ordered to be liquidated in January 2024.
Beijing has announced measures to shore up the sector in recent months, including cutting mortgage rates, easing home-buying restrictions and increasing loans available for unfinished housing projects to more than $500 billion. The slowdown in the real estate sector, which has long accounted for about a quarter of China’s gross domestic product, has weighed on the broader economy. Officials are scheduled to announce economic growth figures for 2024 on Friday.
President Xi Jinping has expressed confidence that China has achieved its official growth target of about five percent.
(This news has not been edited by the NewsDeskReport team. It is published directly from the syndicated feed.)