Hong Kong’s court has approved the debt restructuring plan of Country Garden Holdings Co., Ltd., marking a milestone in the property giant’s efforts to manage its substantial overseas debt.
The approval comes after nearly a year of intense negotiations with creditors and legal proceedings, highlighting the company’s determination to stabilize its finances amid a challenging real estate environment.
The restructuring plan had already secured strong support from creditors during a November 5 meeting. The first group, composed primarily of syndicate loan creditors, voted approximately 83.7% in favor, while the second group, consisting of U.S. dollar bondholders and other overseas creditors, approved at around 96%. With court approval, the plan now has full legal backing and can be formally implemented.
The restructuring addresses roughly $17.7 billion of overseas debt. Under the plan, Country Garden is expected to reduce about $11.7 billion, in interest-bearing liabilities. The plan combines multiple financial tools, including cash buybacks, issuance of equity instruments, swaps for new debt, and in-kind interest payments, designed to optimize debt levels, extend maturities, and lower financing costs. Post-restructuring, new debt financing costs are projected to fall to 1.0%–2.5%, with some maturities extended up to 11.5 years, significantly easing near-term repayment pressures.
Analysts say the court’s approval provides the company with a crucial “breathing space” to manage operations, stabilize cash flow, and focus on reviving property sales. The restructuring is also viewed as a positive signal for China’s broader real estate market, which has been under pressure from high-profile defaults and waning investor confidence.
But challenges remain. Country Garden still faces domestic debt obligations, ongoing cash flow constraints, and a sluggish sales environment in key markets. The long-term success of the restructuring will depend on the company’s ability to leverage this debt relief to restore operational performance, improve liquidity, and strategically manage its assets.
