Investing.com — Shares of Chinese property giant, Country Garden (HK:2007) Holdings, rose significantly as trading resumed in Hong Kong after a nine-month suspension. The company had pledged to reach a debt-restructuring deal with creditors, which led to this positive market response, the Wall Street Journal reported.
Once one of China’s largest developers, Country Garden’s shares jumped as much as 30% early Tuesday. By midday, the shares were 24% higher at 60 Hong Kong cents, or about 8 U.S. cents, although still near historical lows.
The resumption of Country Garden’s stock trading came after the company declared that it had fulfilled the requirements under the resumption guidance. Last week, it published delayed financial results, reporting a net loss of about US$1.75 billion for the first half of 2024, following a record loss of more than US$24 billion in 2023.
In an attempt to ease liquidity pressure and improve its financial condition, the heavily indebted property developer provided various plans and measures. This included negotiating with bondholders of around 18.0 billion yuan of domestic debt, equivalent to US$2.46 billion, to extend maturity dates.
Country Garden is also in talks 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 for loan extension or restructuring agreements, according to the filing on Tuesday.
At a court hearing in Hong Kong on Monday, the developer said it expects to reach an agreement with creditors next month. The winding-up petition hearing was adjourned to May 26, as stated in a company filing.
The positive market response to Country Garden’s announcement also boosted other Chinese property stocks. The Hang Seng Mainland Properties Index gained 2.2%, with China Vanke’s Hong Kong-listed shares advancing 13% and Shimao Group rising 5.4%.
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