China's Country Garden admits that it will not be able to meet all its offshore debt payment obligations

The developer has not paid 57 million of the principal of a debt and warns of "significant pressure" on its cash position

MADRID, 10 Oct. (EUROPA PRESS) -

Country Garden Holding, which was the largest real estate developer in China, acknowledged this Tuesday in a statement sent to the Hong Kong Stock Exchange the non-payment of the principal of "a certain debt" in the amount of 470 million Hong Kong dollars (57 million euros) and has warned that it expects not to be able to meet all its debt payment obligations abroad ('offshore') as scheduled or within the corresponding grace period.

The company has warned that potential non-payment of amounts due, including but not limited to payment obligations on US dollar bonds issued by Country Garden, may result in creditors demanding "accelerated performance of their relevant debt obligations." or adopt coercive measures".

In this sense, the promoter has assured that it will actively promote offshore debt management measures and, under the premise of respecting the existing legal status and the legal payment order of all creditors, will formulate general solutions in a fair and equitable manner. to achieve a long-term sustainable capital structure.

As such, Country Garden has retained China International Capital Corporation Hong Kong Securities and Hualian Norge (China) as financial advisors, as well as Sidley Austin Law Firm as legal advisors to help evaluate the capital structure and liquidity status of the group and formulate an overall plan that offers a solution as soon as possible.

"The company sincerely requests that creditors allow time for it to objectively evaluate the current challenges it faces and work with its advisors to formulate the best pragmatic and feasible solutions for all stakeholders," the document states.

The Chinese real estate developer has highlighted the liquidity pressure that its activities are experiencing, and continues to try to optimize the existing debt structure to ensure that the interests of all investors are safeguarded to the greatest extent possible.

"In an extremely difficult financial environment, the group has insisted on meeting its payment obligations through sales collections and existing cash resources. However, it currently faces severe challenges in sales and financing, and the funds available on its books continue to decline," he acknowledged.

In this regard, it has warned that, although it has used different options, such as the disposal of assets, to obtain cash flow and continue to meet its financial commitments, in the current market environment, "it is still difficult to quickly replenish sufficient cash flow. to improve liquidity in the short term", with the result that the group's cash position "remains under significant pressure".