After a nine-month halt, trading in Hong Kong restarted, and shares of the Chinese real estate behemoth Country Garden (HK:2007) Holdings surged sharply. According to the Wall Street Journal, this favorable market reaction resulted from the company's commitment to come to a debt-restructuring agreement with creditors.




Early Tuesday saw a 30% increase in Country Garden's stock, which was formerly among the biggest developers in China. Although still close to record lows, the shares were up 24% by midday at 60 Hong Kong cents, or roughly 8 US cents.


Following the company's announcement that it had complied with the resumption guidance's requirements, Country Garden's stock trading resumed. Following a record loss of over US$24 billion in 2023, it reported a net loss of over US$1.75 billion for the first half of 2024 in its delayed financial statements released last week.


The highly indebted real estate developer offered a number of ideas and initiatives in an effort to reduce liquidity pressure and enhance its financial situation. This involved negotiating longer maturity dates with bondholders for around 18.0 billion yuan in domestic debt, or US$2.46 billion.

According to the filing on Tuesday, Country Garden is also negotiating loan extension or restructuring agreements with financial institutions and bondholders for 28.7 billion yuan of onshore loans, 3.5 billion yuan of offshore loans, and 0.7 billion yuan of offshore bonds.

The developer stated at a Monday court hearing in Hong Kong that it anticipates reaching a settlement with creditors the following month. According to a corporate filing, the winding-up petition hearing was postponed until May 26.

Other Chinese real estate equities also saw an increase as a result of the favorable market reaction to Country Garden's statement. With shares of China Vanke listed in Hong Kong up 13% and Shimao Group up 5.4%, the Hang Seng Mainland Properties Index increased by 2.2%.

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