via CNN:
Hong Kong/London
CNN
—
Country Garden warned Wednesday that it could default on its vast debts as it reported a loss of 51.5 billion yuan ($7 billion) for the first six months of the year.The company, which was China’s largest residential developer last year, said it had been caught off guard by the depth and persistence of the slump in the real estate market, particularly in smaller Chinese cities, and had failed to react fast enough.
“The company felt deeply remorseful for the unsatisfactory performance,” it said in a filing to the Hong Kong stock exchange.
Country Garden confirmed that it had missed interest payments to holders of some of its bonds earlier this month, and that “if the financial performance of the company continues to deteriorate in the future” the group may default.
“All of the above … indicated the existence of material uncertainties which may cast significant doubt on the group’s ability to continue as a going concern,” it added in the filing.
The troubled real estate giant is battling a liquidity crisis which some fear could spread to China’s wider economy and even spill over abroad.
China Moves to Stabilize Finances of Troubled Shadow Bank
h/t mark000