(Bloomberg) — Country Garden Holdings Co. suffered another record loss in 2023 as one of China’s largest developers continues its lengthy restructuring process after defaulting on its debt.
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The embattled real estate firm reported a loss attributable to shareholders of 178.4 billion yuan ($24.3 billion) for the year, compared with a loss of 6 billion yuan in 2022, according to an exchange filing on Tuesday. Its loss narrowed in the first half of 2024 to 12.8 billion yuan, from 48.9 billion yuan in the same period a year earlier.
The delayed results underscore how much Country Garden, once China’s biggest builder by sales, has struggled during a housing crisis that has rocked Asia’s largest economy for more than three years. Dozens of developers have been hit, with another fallen giant, China Evergrande Group, already being liquidated in Hong Kong.
The builder’s sales have declined significantly as homebuyers lack confidence in its ability to deliver projects, according to Morningstar Inc. analyst Jeff Zhang, who doesn’t expect huge improvements for 2024.
The company said its full-year loss for 2024 should narrow “substantially” from 2023, according to an e-mailed statement.
The results come ahead of a court hearing over a so-called wind-up petition in Hong Kong on Jan. 20. Creditors tend to pursue such actions to speed up the debt restructuring process by expediting talks on a repayment plan. A unit of laminates maker Kingboard Holdings Ltd. filed the petition in February last year.
Earlier this month, Country Garden said it proposed debt restructuring terms with key banks that, if implemented, would enable it to achieve “significant deleveraging,” with a targeted debt reduction of as much as $11.6 billion. But a key bondholder group, which holds more than 30% of the company’s outstanding notes, has disagreed with the terms. Country Garden defaulted on dollar bonds in late 2023.
Shares of Country Garden will remain suspended in Hong Kong. The stock last traded on March 28 last year, having lost about 97% of its market value from its peak in 2018.
–With assistance from Foster Wong.
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