Country Garden: The Chinese property firm has suspended shares in Hong Kong

  • By Mariko Oi
  • Business Correspondent

image source, Good pictures

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Country Garden said last week it would delay its annual earnings report as it faces a winding-up petition.

Crisis-hit Chinese property developer Country Garden has suspended trading of its shares on the Hong Kong stock exchange after it delayed publishing its annual financial results.

The company said last week that it needed more time to gather information as it restructured its loans.

It defaulted on its foreign debt last year and faces a winding-up petition.

In January, rival real estate firm China Evergrande was ordered to liquidate by a Hong Kong court.

The first hearing on Country Garden's closing petition filed by Ever Credit Limited is scheduled for May 17.

EverCredit is a unit of Kingboard Holdings, a laminate manufacturer and property investor.

Country Garden's shares were closed as the Hong Kong stock market reopened after the Easter weekend.

Shares in Chinese state-backed property developer China Wanke fell to record lows on Tuesday.

On Friday, the company reported a more than 50% drop in its annual profit and told investors that it aims to boost its cash flow by reducing debt over the next two years.

China's real estate industry faces a major financial crisis from 2021 when the government introduced measures to limit the amount that big developers can borrow.

Several major Chinese property developers, including Evergrande and Country Garden, have defaulted on their loans in the past few years.

As the sector accounts for one-third of the economy, problems in the country's property market have a major impact.

Beijing has announced various measures in an attempt to boost housing demand.

Last month, the country's financial markets regulator accused Evergrande and its founder Hui Ka Yan of inflating revenues by $78bn (£62.2bn) over the two years it defaulted on its debt.

The company's main business, Hengda Real Estate, was fined $583.5 million, while Mr Hui faces a lifetime ban from China's financial markets.

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