Bloomberg: Builder Country Garden’s Debt Restructuring Gets Court Approval

(Bloomberg) -- Chinese builder Country Garden Holdings Co. received a formal sign-off from a Hong Kong court for its $14.1 billion offshore debt plan, after more than two years of restructuring talks.

While debt holders have already given their backing to the deal, the court’s green light means the plan can proceed, lightening Country Garden’s debt burden — thanks partly to creditor haircuts — and giving it more stability amid China’s still-struggling property market.

The restructuring was the product of long negotiations that at times neared collapse, beginning after the Guangdong-based homebuilder defaulted in 2023. Even with the restructuring behind it, the company’s future is uncertain.***

Adding to the concerns in the sector, two of China’s private data agencies withheld monthly home sales figures for November at the government’s behest. China’s property market has faced renewed sales weakness since the second quarter, making global banks more pessimistic about the sector. UBS Group AG expects home prices to keep falling for at least two more years.

Country Garden faced numerous challenges during restructuring talks. Its initial proposal failed to win over bondholders, while bank lenders in May warned the plan wouldn’t succeed unless the company met their demands. Along the way, it changed its financial advisers twice.