According to two sources familiar with the matter, Country Garden Holdings, one of China's largest property developers, has secured a loan of HKD 900 million
($114.65 million) from a private lender to refinance an existing bank loan. The loan was offered to a subsidiary of Country Garden by Hong Kong-based investment firm Flow Capital (HK) Ltd. One of the sources mentioned that the majority of the loan will be used to repay the company's outstanding debt of around HKD 700 million to a Hong Kong bank. The new loan, which has a two-year term, will be supported by guarantees from Country Garden's listed parent company and a Hong Kong property, both sources said. The interest rate for the loan has not yet been disclosed.
The loan comes after Country Garden posted its first net loss since listing in 2007, as the Chinese property market struggles with a debt crisis and sluggish sales. Bloomberg reported earlier on Thursday that Country Garden had secured the loan from Flow Capital (HK) Ltd. However, Country Garden has not commented on the matter.
The company's shares fell by 2% on Thursday, extending its decline of around 60% over the past year. Country Garden is not the only Chinese property developer facing financial difficulties as several others in the industry are grappling with high debt levels amid government curbs on the real estate sector. Photo by 钉钉, Wikimedia commons.
