Country Garden Seeking Debt Restructuring with Offshore Bondholders

Two sources with direct knowledge of the matter revealed that China's embattled Country Garden is working towards formulating a preliminary plan to restructure its offshore debt by the end of the year. The largest private property developer in the country, who failed to make a coupon payment in October, leading to default, plans to initiate official discussions with overseas bondholders by February or March of next year.

The firm plans to share its cash flow projections with key bondholders by the end of the year as part of the preliminary restructuring plan. The sources chose not to be identified due to the confidential nature of the matter. Country Garden, with nearly $11 billion in offshore bonds, chose not to provide a comment.

There has been no previously reported timeline for the company's debt restructuring plan. Since August, Country Garden has been the focus of attention due to its publicized debt issues, causing market turbulence and prompting Beijing to implement additional support measures for the real estate industry.

It is now part of a lengthy catalog of Chinese real estate companies that are in the process of developing debt restructuring plans or have already submitted them to creditors following their default on overseas debt within the last two years.

According to Reuters, Chinese officials have requested that Ping An Insurance Group, a large domestic financial company, acquire a majority stake in Country Garden. Ping An denied the report.

The government's proposed rescue of Country Garden represents a major effort by authorities to aid the financially strained and heavily indebted property industry, which makes up a significant portion of China's economy. This intervention would be among the most impactful actions taken to date to support the sector.