Chinese real estate developer Country Garden has said that its $100bn project Forest City project in Malaysia is advancing as intended with enough required assets, although concerns were raised about its financial health amid debt repayment woes, reported Reuters.
This news comes as Country Garden, earlier this month, defaulted on dollar bond coupon payments totalling $22.5m that were due on 6 August.
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These notes are to mature in February 2026 and August 2030, respectively.
To be paid in US dollars, the two payments have a grace period of 30 days.
The developer’s missing payments have sparked concerns that Country Garden’s property debt crisis could spill overseas and hinder the wider economic recovery of a sector that is currently grappling with a debt crisis.
Since late 2021, the country’s real estate sector has been witnessing a host of debt defaults by builders, with China’s Evergrande Group being at the core of this crisis.
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By GlobalDataCountry Garden’s Singapore and Malaysia branches stated that the Malaysian venture is continuing without interruption and that its sales are robust.
The Forest City project plans to house 700,000 people by 2035. It would feature office towers, shopping centres, schools, and residential buildings in its completion.
Originally launched in 2016, the project currently houses approximately 9,000 people. It saw demand fall due to the Covid-19 pandemic and Beijing’s move to curb capital outflow.
The company stated: “Various debt management measures are considered to actively resolve the pressure of periodic liquidity, to ensure the company’s long-term future development.”
Meanwhile, the business has divested a minority stake in a mixed development in Guangzhou, China, for $178.35m.
As per a filing of 25 August 2023 seen by Reuters, the company also extended a creditor voting deadline to 31 August with a view to defer repayment for an onshore private bond valued at 3.9bn yuan ($300m).
