HONG KONG: Country Garden’s bondholders are seeking urgent talks with the company and its advisers after the troubled property developer missed a $15 million coupon repayment, putting it at risk of default, according to three sources with direct knowledge of the matter.
Two bondholder groups have emerged seeking discussions about a potential debt restructuring package, with a major one close to appointing either Moelis or PJT as financial advisers, said the sources, who declined to be identified because the information is confidential.
That group holds about $2 billion of the debt-laden Chinese property developer’s offshore bonds, one the sources said, and consists of international and fund manager investors.
PJT, Moelis and Country Garden declined to comment. Country Garden on Wednesday was due to pay a $15 million coupon payment on a bond due September 2025 when a 30-day grace period ended, but two bondholders told Reuters they were yet to receive it.
Non-payment would put the developer at risk of default on its nearly $11 billion of outstanding offshore bonds and could trigger one of China’s biggest corporate debt restructurings.
The company has not commented on whether it made the payment.
On Wednesday, it said it was unlikely to be able to meet most of its upcoming offshore debt payments.
Grace period for China’s Country Garden coupon payment expires
Country Garden has appointed Houlihan Lokey, China International Capital Corporation (CICC) and law firm Sidley Austin as advisers to examine its capital structure and liquidity position and formulate a “holistic” solution.
The company said on Thursday its founder Yeung Kwok Keung and chairperson Yang Huiyan, his daughter, are at work as usual, according to the debt-laden Chinese property developer’s official WeChat account, denying online reports of the pair leaving the country.
Country Garden’s missed payment comes on the heels of an investigation into the chairman of beleaguered peer China Evergrande, which has defaulted and has been at the centre of the sector’s debt crisis.