The crisis in the Chinese real estate sector caused Country Garden, another major developer in the country, to suffer losses as its shares fell. In this respect informs Reuters agency.
News that the firm, which has thousands of projects in nearly 300 cities in China, has taken action to refinance part of its 2019 credit line, has plunged its shares by more than 5%, a record since the end of last year.
Market experts agreed that refinancing will not save the developer from problems. The current situation in general is a clear example of the problem in the government’s approach to the crisis in the real estate sector. Also, if sales don’t increase, shareholders will be concerned about payback opportunities for developers, such as Country Garden, which are common in smaller towns. And if the company defaults, it will serve as a bad signal for the market that the authorities won’t deal with and bail out the companies’ bankruptcy.
Analysts thought an even more difficult situation for the company would come before the end of the year, as it had to repay about $12.8 billion in bonds. At the same time, the organization’s debts have already exceeded $40 billion. However, some experts added that refinancing the loan was a small but positive moment for Country Garden, as most of the outstanding amount was delayed for 30 months instead of being repaid immediately.
July 18 Bloomberg reportedChina’s largest real estate developer, Evergrande, has reported losses of $81 billion over the past two years. Also, due to financial problems, the developer is on the verge of liquidation.
Previously reportedCities in China are in debt but continue to spend money.