According to Reuters, Country Garden’s creditors agreed to postpone the installments on six onshore bonds by three years.
The real estate tycoon has before suggested deferring the payments on eight onshore notes worth $1.5 billion.
On Tuesday, the announcement caused Country Garden’s shares to increase by as much as 10%.
The stock of Chinese real estate behemoth Country Garden lost 50% of its value this year due to its cash flow problems and the country’s real estate crisis, but it recovered some of those losses on Tuesday when the company’s creditors were granted a reprieve.
After learning that its creditors had agreed to postpone payments on six of its onshore bonds by three years, the company’s shares increased as much as 10% on Tuesday, according to Reuters, which cited two persons with knowledge of the situation.
According to Reuters, the developer’s creditors decided on Monday whether to approve the company’s plan to give eight onshore notes a three-year maturity extension. 10.8 billion Chinese Yuan, or $1.48 billion, is the total value of the bonds.
Six of the bonds had their extension authorized by creditors. The voting for the final two bonds has been postponed.
After paying the interest on two US dollar bonds within the grace periods for a week, Country Garden received its most recent reprieve. The real estate company also succeeded in getting the consent of creditors on September 1 to postpone the maturity of a different 3.9 billion yuan onshore bond.
The situation at Country Garden is being widely observed because the company is the most well-known Chinese real estate giant to experience a liquidity crisis in the past two years. At the end of 2022, the company had about $200 billion in liabilities. Following the COVID-19 outbreak, China’s economy has likewise been having a difficult time bouncing back.
The turmoil at the private developer even rekindled concerns that problems in the second-largest economy in the world would spread to other industries both domestically and abroad.
At 2.25 p.m. local time, shares of Country Garden Holdings were up 5.8% at 1.09 Hong Kong dollars, or 14 cents. They have decreased by about 50% so far this year.