Biguoyuan Reports Record First-Half Loss of 9 Trillion Won... "Default Concerns"

"Significant Uncertainty... Doubts Over Group's Survival"
Request to Extend Bond Grace Period by 40 Days

Country Garden, China's largest private real estate developer, which failed to repay corporate bond interest earlier this month, announced a loss close to 9 trillion won in the first half of this year, warning that if the performance continues to deteriorate, there is a risk of default.

[Image source=Yonhap News]

According to major foreign media including Bloomberg on the 30th (local time), Country Garden recorded a loss of 48.9 billion yuan (about 8.87 trillion won) in the first half of this year, marking the largest loss ever. Revenue for the first half increased by 39% year-on-year to 226 billion yuan (about 41 trillion won).

Country Garden stated, "The group's liquidity is under unprecedented pressure due to difficulties in sales and financing," and warned that if financial performance continues to worsen, it may fail to fulfill its debt repayment obligations, "which could result in a default." It further explained, "Significant uncertainty raises serious doubts about the group's ability to continue as a going concern."

Country Garden admitted that it did not take appropriate measures to respond to the economic downturn and failed to recognize the risks of over-reliance on the low-priced real estate market. It added, "The extent and persistence of the market decline caught the company off guard as it lowered its guard."

Bloomberg reported on the Country Garden situation, saying, "It shows how the deepening real estate crisis in China has hit giant real estate companies," and "Country Garden has four times more real estate projects than its competitor Evergrande. The company's debt spiral, once the largest developer in China by sales, could be more severe than Evergrande's."

Meanwhile, facing a default crisis, Country Garden plans to request creditors to extend the grace period by 40 days for bonds worth 3.9 billion yuan (about 710 billion won) maturing on the 2nd of next month. Although Country Garden is struggling to avoid default, the situation is unfavorable. The total principal and interest of bonds that Country Garden must cover amount to 15.72 billion yuan (about 2.85 trillion won). Starting with the 3.9 billion yuan bond due early next month, maturities will continue to come due until early next year. The 30-day grace period for interest on two types of dollar bonds, which were not paid on the 7th, is also nearing its deadline.

This content was produced with the assistance of AI translation services.