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Chinese developer Country Garden says expects to suspend stock listing

Chinese developer Country Garden says expects to suspend stock listing
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Major Chinese property developer Country Garden expects to suspend trading of its Hong Kong-listed shares, the company said in a filing on Thursday, highlighting unprecedented challenges gripping the country’s debt-saddled real estate sector.

Country Garden is among several of China’s largest developers to face setbacks in recent years, along with Evergrande and Vanke, fuelling concerns about the stability of the world’s second-largest economy.

The company postponed the expected release of its 2023 results on Thursday, saying in a Hong Kong stock exchange filing that it “needs to collect more information to make appropriate accounting estimates and judgments”.

“It is expected that trading in the shares of the Company on the Stock Exchange will be suspended with effect from 9:00 am (0100 GMT) on 2 April 2024,” Country Garden said, citing rules that require a suspension if an annual report is not published by Sunday.

A year ago, the firm posted its first full-year loss — more than 6 billion yuan ($844 million) — since it listed on the Hong Kong Stock Exchange in 2007.

Country Garden warned in October that it may not be able to meet all of its offshore payment obligations in time.

The real estate giant has defaulted on payments even as new deadlines loom, and failed repay 96 million yuan ($13 million) early March.

It is now in a grace period expiring in April, during which time it will seek to avoid defaulting on payment.

Large sums of unpaid debt by Country Garden would send ripple effects across markets and plunge a sector already under stress even further into the doldrums.

Real estate and construction have long accounted for more than a quarter of China’s gross domestic product (GDP), serving as a key engine for growth in the national economy.

But falling property prices are dissuading consumers from investing in homes, causing sales to plummet.

Country Garden competitor Evergrande — previously China’s top real estate firm — was the first to fall, fighting for survival since 2021.

A Hong Kong court ordered Evergrande’s liquidation in January.

Country Garden now faces a similar fate, with a Hong Kong ruling due in May in response to a winding-up petition submitted by creditors over non-payment of debt.

Country Garden was China’s seventh-largest developer in terms of sales last year.

The firm was founded in 1992 by Yang Guoqiang, who stepped down as head of the real estate giant in March 2023.

His daughter, Yang Huiyan — once the richest woman in China by virtue of inherited shares — now runs Country Garden.

Their family fortune fell by $9 billion last year, according to a Hurun ranking of billionaires.

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Agence France-Presse (AFP) is a French international news agency headquartered in Paris, France. Founded in 1835 as Havas, it is the world's oldest news agency.

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