China property firm Country Garden suspends shares

3 weeks ago 27

Signage at the Phoenix Palace project, developed by Country Garden Holdings.Image source, Getty Images

Image caption,

Country Garden said last week it would delay is annual earnings report as it faces a winding-up petition

By Mariko Oi

Business reporter

Crisis-hit Chinese property developer Country Garden has suspended trade in its shares on the Hong Kong Stock Exchange after delaying the publication of its annual financial results.

The firm said last week that it needed more time to collect information as it restructures its debts.

It defaulted on its overseas debt last year and faces a winding-up petition.

In January, rival real estate giant China Evergrande was ordered to liquidate by a Hong Kong court.

Country Garden said "due to the continuous volatility of the industry, the operating environment the Group confronting is becoming increasingly complex", when it announced its earnings report would be delayed..

The first hearing for Country Garden's winding-up petition, which was filed by Ever Credit Ltd, is scheduled for 17 May.

Ever Credit is a unit of Kingboard Holdings, a laminates maker and property investor.

The suspension of Country Garden's shares came as the Hong Kong stock market reopened after the Easter weekend.

Also on Tuesday, shares in Chinese state-backed property developer China Vanke fell to a record low.

On Friday, the firm reported a fall of more than 50% in its annual profit and told investors that it aimed to boost its cash flow by slashing debt over the next two years.

China's real estate industry has been facing a major financial squeeze since 2021 when the government introduced measures to curb the amount big developers could borrow.

Several large Chinese property developers, including Evergrande and Country Garden, have defaulted on their debts in the last few years.

Problems in the country's property market are having a major impact as the sector accounts for around a third of the economy.

Beijing has announced various measures in a bid to boost housing demand.

Last month, the country's financial markets regulator accused Evergrande and its founder, Hui Ka Yan, of inflating revenues by $78bn (£62.2bn) in the two years before the firm defaulted on its debt.

The company's mainland business Hengda Real Estate was fined $583.5m while Mr Hui faces being banned for life from China's financial markets.

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