- Country Garden halts Hong Kong trading amid financial crisis
- Company postpones earnings report; defaults on foreign obligations
- Evergrande petitioned to liquidate; Vanke shares hit record low
A crisis-stricken Country Garden, a Chinese real estate developer, has halted trading on the Hong Kong Stock Exchange after postponing the disclosure of its annual financial results.
The company announced last week that it required additional time to gather data to restructure its debts.
The company defaulted on its foreign obligations the previous year and faced a winding-up petition.
A Hong Kong court ordered rival real estate colossus China Evergrande to liquidate in January.
When it announced the postponement of its earnings report, Country Garden stated that “the operating environment the Group is confronting is becoming increasingly complex due to the ongoing volatility of the industry.”
The initial hearing regarding the petition for dissolution of Country Garden, submitted by Ever Credit Ltd, is planned for May 17th.
Ever Credit is a subsidiary of the property investor and laminates manufacturer Kingboard Holdings.
Country Garden’s shares were suspended after the Hong Kong Stock Exchange reopened during the Easter holiday.
Additionally, on Tuesday, China Vanke shares, which the Chinese government sponsors, reached an all-time low.
On Friday, the company disclosed to investors that its annual profit had decreased by more than fifty per cent and intended to increase cash flow by reducing debt over the next two years.
China’s real estate sector has been grappling with a significant financial constraint ever since governmental regulations in 2021 restricted the borrowing capacity of substantial developers.
“Don’t miss out! Grab your free shares of Webull UK today!”
In recent years, several prominent Chinese real estate developers, Country Garden and Evergrande, have been observed to have defaulted on their financial obligations.
The country’s property market is experiencing significant repercussions due to its substantial contribution of approximately one-third to the economy.
Beijing has declared diverse initiatives to increase housing demand.
Evergrande and its founder, Hui Ka Yan, were charged by the nation’s financial markets regulator last month with artificially boosting revenues by $78 billion (£62.2 billion) in the two years preceding the debt default.
A fine of $583.5 million was imposed on the company’s mainland subsidiary, Hengda Real Estate, whereas Mr. Hui is subject to a life prohibition from China’s financial markets.
