BigGo Finance: Country Garden Pays Over 2.8 Billion Yuan in Half-Year, Credit Repair Accelerates After Offshore Debt Restructuring

On June 30, Country Garden made its first interest payment of $14.34 million (approximately 97.51 million yuan) on time and in full following the effectiveness of its offshore debt restructuring. Combined with the $398 million paid in January, cumulative cash payments exceeded 2.8 billion yuan (approximately $413.3 million) within six months. Management has designated 2026 as the critical year for transitioning from "guaranteed housing delivery" to "normal operations," having delivered nearly 1.85 million homes over the past four years, with operating cash flow turning positive in 2025. Meanwhile, the accelerated conversion of restructuring-related convertible bonds has added approximately 18.34 billion new shares. While this dilutes equity in the short term and faces pressure from Hong Kong market volatility, analysts believe industry fundamentals have not deteriorated, and a valuation recovery rally may resume.

Against the backdrop of sustained liquidity pressure in China's real estate sector, Country Garden (02007.HK) is gradually repairing market expectations for its creditworthiness with tangible cash fulfillment actions. On June 30, the company reached its first interest payment milestone after its offshore debt restructuring took effect, paying $14.34 million (approximately 97.51 million yuan) on time and in full, marking the entry of the restructuring plan into a substantive fulfillment phase.

This is Country Garden's second cash fulfillment since the restructuring was implemented. In January, during the first week after the restructuring plan took effect, Country Garden completed a headline cash payment of $398 million (over 2.7 billion yuan). Within just six months, the two cumulative cash payments exceeding 2.8 billion yuan (approximately $413.3 million) are viewed by the market as a critical breakthrough in the company's credit reconstruction.

Looking back to December 30, 2025, Country Garden's offshore debt restructuring plan totaling approximately $17.7 billion officially took effect, becoming one of the largest-scale and most efficiently executed cross-border debt restructuring cases in China's real estate sector in recent years. The June 30 interest payment represents the first "interest fulfillment" on the new debt instruments post-restructuring.

According to sources, Country Garden coordinated and deployed various funds in advance, depositing the full $14.34 million into the designated payment account on June 29, completing the reserve one day ahead of schedule, demonstrating the company's thorough preparation in fund allocation and fulfillment willingness.

Country Garden stated that since the offshore debt restructuring plan took effect, the company has consistently prioritized safeguarding the legitimate rights and interests of all creditors, systematically advancing the entire debt fulfillment process, and honoring restructuring commitments with real capital.

Analysts point out that against the backdrop of sustained industry liquidity pressure, Country Garden, as a leading private mainland Chinese property developer, exhibits a rare normal cash fulfillment behavior that helps rebuild credit expectations. Once such expectations are formed, it will send a positive signal for improving the overall credit environment for private property developers in China.

Notably, the timing of this first interest payment coincides precisely with a transitional juncture in Country Garden's operational rhythm. Company management has explicitly designated 2026 as the most critical year for transitioning from "guaranteed housing delivery" to "normal operations," aiming to complete the majority of delivery tasks by mid-year and subsequently shift fully toward repairing the balance sheet and restoring normal operations.

Looking back over recent years, from 2022 to 2025, Country Garden cumulatively delivered nearly 1.85 million homes, with the bulk of delivery guarantee tasks largely completed. In 2025, Country Garden's operating cash flow turned positive again, recording 1.53 billion yuan (approximately $226.4 million), indicating that the peak of rigid cash outflows is passing.

As a core component of the restructuring consideration, Country Garden's convertible bond conversion is also accelerating. On June 29, according to Country Garden's disclosed share issuance report, the company's cumulative issued shares reached 46.33 billion, with new shares issued after the restructuring plan's implementation totaling approximately 18.34 billion, representing nearly 65.5% of the issued share capital prior to the restructuring.

Such large-scale equity dilution objectively exerts short-term pressure on the share price. Coupled with the current deep volatility in the Hong Kong stock market and persistently tightening risk appetite, this further amplifies downward price elasticity. However, analysts note that this round of decline is primarily affected by the spillover from high volatility in overseas markets since June, with Hong Kong stocks facing the dual headwinds of liquidity tightening and valuation compression, representing a temporary adjustment rather than a substantive deterioration in industry fundamentals.

As external liquidity disruptions gradually ease, a valuation recovery rally for mainland China property stocks listed in Hong Kong may resume, potentially correcting the market's current excessively pessimistic pricing. Country Garden's dual progress in debt fulfillment and operational transition could serve as an important catalyst for its valuation recovery.

LINK: https://finance.biggo.com/news/f348cc90-a948-4bf5-b585-eee4dc623821