Country Garden Faces Grim Outlook as Sales Slump Deepens in June | Company Business News-OxBig News Network

(Bloomberg) — Country Garden Holdings Co.’s sales slid again in June, with the developer faring worse than peers, as a lack of policy support dampened demand. 

Monthly contracted sales at the Foshan-based company dropped 35% from a year earlier to 2.81 billion yuan ($392 million), according to Bloomberg calculations based on a Friday filing. The decline was from an already low base, and was steeper than the 23% drop in new home sales for China’s top 100 developers. 

Falling prices in China are eroding corporate profits and employee income, leading to suppressed demand for housing purchases, just as the effects of a stimulus blitz last September start to wear off. Premier Li Qiang last month pledged more action to revive the market, which analysts say is necessary to boost consumption and offset a threat to exports from US tariffs.

Country Garden has been counting on a turnaround in sales as it seeks to restructure its debt after a default more than a year ago. Yet its efforts to win backing for a $14.1 billion offshore restructuring are running into resistance as a key group of banks said failure to accept some of their demands would be a “deal breaker,” according to a court hearing last month. 

The builder needs support from three-quarters of debt holders among two individual groups — bank lenders and bondholders. It has said that it has backing from holders of 70% of bonds, but even if it gets more from that class, it still needs bank creditors to get on board to pass the plan through a “scheme of arrangement” procedure. It has been given a few months’ reprieve from its liquidation petition hearing, with the next one set for Aug. 11. 

Country Garden has said it aims to implement the proposed restructuring by the end of 2025 and wants to reach an agreement with its major creditors on the terms “as soon as practicable.” 

–With assistance from Foster Wong.

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