The founding family of Country Garden Holdings Co. recently provided the developer with an interest-free loan of $300 million, local media reported, a sign of its commitment to the ailing Chinese property giant.
(Bloomberg) — The founding family of Country Garden Holdings Co. recently provided the developer with an interest-free loan of $300 million, local media reported, a sign of its commitment to the ailing Chinese property giant.
The loan from co-founder Yeung Kwok Keung’s family was reported by The Paper on Friday, citing unidentified people. Country Garden didn’t comment.
It’s a signal of support from the billionaire clan as the company grapples with a potential default and massive debt restructuring. Once China’s biggest developer, Country Garden this week warned that it won’t be able to meet all of its future offshore payment obligations. It faces the expiry of a grace period for interest on a dollar bond next week.
Yeung, who handed over the helm to his daughter earlier this year, made a rare public appearance this week, Country Garden said separately on social media Friday. The former chairman on Wednesday visited one of the firm’s construction sites in the Shunde district of Foshan city, where the developer is based. The company also put up a short video clip, in which Yeung was accompanied by Country Garden President Mo Bin.
Yeung tendered his resignation in March, citing his age, and passed the baton to his daughter, Yang Huiyan. Yang, who worked as co-chairman for years before that, then took over as the sole chairman during a challenging time for the Chinese real estate firm.
Yeung sold a private jet to boost Country Garden’s cash flow, local media Cailian reported Friday. Another plane of his was also put up for sale, according to the report.
An unprecedented housing slowdown has drawn public scrutiny of China’s property tycoons. China Evergrande Group Chairman Hui Ka Yan, who is now under police control, has been widely criticized on social media for the way he handled the crisis at his defaulted firm. Many have questioned his dedication to completing unfinished projects and repaying investors who bought the company’s wealth products.
Country Garden has managed to avoid its first offshore bond payment failure and reschedule local debt in recent months, though investors are bracing for delinquencies and a likely debt overhaul.
The company missed initial deadlines last month to pay $55.4 million of interest on two dollar bonds, and grace periods are respectively set to end Oct. 17-18 and Oct. 27. It has $11 billion of offshore notes outstanding, according to data compiled by Bloomberg.
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