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COGARD Faces Risk of a Specific Deal Challenging its Debt Restructuring Support
May 27, 2025
Country Garden (COGARD) is reported to be facing challenges in securing support for its $14.1bn offshore debt restructuring. The developer’s liquidation hearing was postponed to August 11, facing resistance from key bank creditors. This comes after a particular $178mn deal concerning the return of seized collateral that saw no agreement. A group of banks, known as the co-ordination committee, insisted on specific terms around credit enhancements, payment schedules, and seniority. Without agreement on these demands, lawyers warn that the restructuring would fail. This committee holds significant influence, controlling nearly half of three syndicated loans totaling $3.6bn. For the restructuring to move forward under a court-led Scheme of Arrangement (SOA), COGARD needs approval from 75% of both its bank lenders and bondholders. Though it has secured support from 70% of bondholders, the banks’ backing is still critical. The company has been in debt talks since defaulting in October 2023 and hopes to finalize the restructuring by December. It plans to submit court documents in mid-August to initiate a creditor vote. The case marks one of the largest restructurings amid China’s ongoing real estate crisis.
Its dollar bonds are trading stable, albeit at deeply distressed levels of 7-8 cents on the dollar.
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