Country Garden Seeks $13 Billion Lifeline with Convertible Bond Issue

The move is seen as a crucial step in Country Garden's efforts to restructure its massive debt, which has been exacerbated by the country's real estate downturn. The company has been struggling to meet its debt obligations, with several major developers in China facing similar challenges. "This is a significant move by Country Garden to address its debt issues and stabilize its financial situation," said a Hong Kong-based analyst, who wished to remain anonymous. "The mandatory convertible bonds will provide the company with much-needed liquidity, while the issuance of new shares will help to pay off some of its debts." The real estate crisis in China has been ongoing for several years, with many developers facing significant financial difficulties. The country's property market has been plagued by oversupply, declining sales, and a surge in defaults. According to data from the China Real Estate Index System, the number of property developers that defaulted on their debt payments in 2024 reached a record high. Country Garden's decision to issue mandatory convertible bonds and new shares is seen as a response to these challenges. Industry experts say that Country Garden's move is not only significant for the company itself but also for the broader Chinese real estate market. "This is a test case for the Chinese government's efforts to address the real estate crisis," said a Beijing-based economist. "If Country Garden's restructuring is successful, it could set a precedent for other developers facing similar challenges." However, others are more cautious, noting that the company's debt issues are complex and may not be easily resolved. Country Garden's shares have been volatile in recent months, reflecting the company's financial struggles. The company's stock price has fallen by more than 50% in the past year, making it one of the worst-performing stocks in the Hong Kong market. The company's management has been working to address its debt issues and stabilize its financial situation, but the outcome remains uncertain. The company's restructuring plan is expected to be finalized in the coming weeks, with the mandatory convertible bonds and new shares issuance expected to take place soon after. The success of Country Garden's restructuring will be closely watched by investors and analysts, who will be looking for signs of improvement in the company's financial situation.