Country Garden at risk of default

(Sharecast News) - China's crisis-hit Country Garden edged closer to defaulting on its international debt on Wednesday, after it missed a key interest payment deadline. The hugely-indebted property developer, one of China's biggest, was thought to have had until 17 or 18 October to pay a $15.4m coupon due on an overseas bond.

However, that deadline, which had already been extended by 30 days, has since passed and the firm told Bloomberg it no longer expects to make the payment.

In a statement, it said: "The company expects that it won't be able to meet all of its offshore payment obligations on time, due to a deep correction in China's home market and its subdued sales."

Bloomberg also noted that an unnamed holder of the note said it had not yet received any money.

Country Garden, which has total liabilities of around $186bn and around $11bn in dollar-denominated debt, was hit hard by Beijing's decision to crack down on the country's once red hot property sector.

Developers such as Country Garden and crisis-hit Evergrande borrowed heavily to build vast portfolios, but as demand fell, they were left cash poor and have struggled to service their debts.

In August, Country Garden reported a record $6.7bn loss for the first six months of the year, after sales fell 44%.

Country Garden has around 3,000 housing projects in China and employs around 60,000 people.