Country Garden will try to ‘pick itself up from where it has fallen’

Chicago, Aug. 10 – Country Garden Holdings Co. Ltd. released a profit warning and announcement on Thursday that only obliquely referenced what is more commonly known, that the company missed coupon payments for two dollar-denominated bonds that were due on Sunday.

The company is now operating within the 30-day grace period.

Without numbers that are only preliminary and unaudited, the Chinese property developer expects to record a net loss ranging from RMB 45 billion to RMB 55 billion for the six months ended June 30.

The company cited a decrease in gross profit margins in the real estate sector and an increase in impairment of property projects as a result of the decline in sales in the real estate industry, as well as the expected foreign exchange loss from foreign exchange fluctuations.

The company, cognizant that it was facing an extremely difficult situation industry-wide, asserted it had taken measures to counteract the challenges.

It had worked to accelerate the collection of sales proceeds and debt receivables, minimized expenses and utilized financial support from the company’s chairman of the board and a controlling shareholder.

Country Garden finds itself now in a position where the forecast it made on the cycle of market adjustment and the estimates on the depth, intensity and continuity of the market downturn were insufficient.

The company plans a self-rescue, currently, stating, “One shall pick himself up from where he has fallen,” in the disclosure.

Presumably, this means that at this time the company does not plan to rely on a court rescue.

The company made assurance that it will continue to deliver properties to consumers and fulfill its commitment to property owners.

The company will also be working with stakeholders and consider adopting various debt management measures to safeguard the company’s long-term development in the future, so as to “preserve value for all stakeholders and safeguard their interests.”

Finally, the company will ensure orderly operations and strengthen its organization and leadership while it works through its biggest difficulties since its establishment.

Country Garden is a Foshan, China, real estate developer.

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