Country Garden pledges to deliver homes on time amid debt restructuring, litigation

Country Garden Holdings pledged to deliver homes to buyers on time and maintain good communications with authorities and stakeholders, as the troubled Chinese developer struggles to reorganise 258 billion yuan (US$35.4 billion) of debt and shake off legal troubles.

Yang Huiyan, the company’s chairwoman and controlling shareholder, called on its top managers to guarantee quality and quantity in its business, according to a statement posted on its official WeChat social media account. It also promised to pay wages on time, especially to migrant workers, with less than two months before the Lunar New Year festival.

“Although we are facing difficulties in the short term, as long as we persevere and work hard, we will definitely be able to overcome the storm and usher in a bright future,” Yang said.

The statement, issued after its monthly management meeting on Friday, came on the same day the Foshan-based home builder was chastised by the Shanghai Stock Exchange for failing to publish its 2023 annual report and 2024 interim report to shareholders.

The developer owed 102 billion yuan to domestic and offshore bondholders and 156 billion yuan to banks as of June 2023, based on its last published accounts in August 2023. Creditors have since sued to wind-up the company to recover their debts, with the next hearing in Hong Kong scheduled for January 20.

Country Garden recorded 3.01 billion yuan of contracted sales in November, a 52 per cent slump from a year earlier, according to a Hong Kong stock exchange filing on December 4. The firm could end the year with 48 billion yuan in annual sales at its current pace, versus 174.3 billion yuan in 2023. It had 550 billion yuan of contracted sales in 2019.

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December is a critical time for the company to complete its tasks for the year and the pressure remains high, according to company president Mo Bin. The developer is making progress in preparing its financial statements and will publish them as soon as practicable, he said in an exchange filing on Friday.