China: Property developer firm Country Garden faces loss of USD 7 billion in first six months of 2023

Beijing [China], September 1 (ANI): Country Garden, one of China's property developers, said that it has faced a loss of USD 7 billion during the first six months of 2023. The property developer company said that it could default on its debts, CNN reported. 
The firm, which was China's largest residential developer in 2022, said it had been caught off guard by the depth and persistence of the slump in the real estate market, mainly in smaller Chinese cities and had not been able to react fast enough, according to CNN. 
In a filing to the Hong Kong Stock Exchange, Country Garden said, "The company felt deeply remorseful for the unsatisfactory performance." The company said that it had missed interest payments to holders of some of its bonds in August.
It further said that the company might default "if the financial performance of the company continues to deteriorate in the future," as per the CNN report. In the filing, Country Garden said, "All of the above … indicated the existence of material uncertainties which may cast significant doubt on the group’s ability to continue as a going concern." 
As per the news report, Country Garden has nearly USD 200 billion in total liabilities. The company faces mounting pressure to pay off its debts. Country Garden has about USD 4.3 billion in bonds set to mature through the end of 2024, CNN reported citing Moody's. 
Earlier in August, reports about the property developer company missing payments on two dollar-denominated bonds shocked the market. Last week, Country Garden moved the deadline from August 25 to August 31 for bondholders to vote on a plan to extend payment on the USD 530 million bond. 
Investors expressed worry that a debt default by the company could cause a further blow to already fragile investor confidence as China attempts to improve the ailing sector.
On August 10, Country Garden said that it was facing the "biggest difficulty" since its establishment in 1992. The statement resulted in a sell-off in the company’s securities, forcing it briefly to suspend trading in 11 of its onshore bonds. 
Earlier this week, Guangzhou became the first major city in China to ease mortgage rules in a bid to encourage homebuying, CNN reported. 
Under the new rules, people who have held mortgages previously can be considered first-time homebuyers and enjoy preferential loans, CNN reported citing the city government's notice.
The decision of the city authorities came days after three Chinese regulators issued a joint statement calling on local governments to ease mortgage restrictions. (ANI)