Country Garden Agrees to Key Bank Demands, Easing Debt Deal Path
The company, once China's biggest developer, has sent a document to a group of banks known as the co-ordination committee addressing their concerns. The document details a deal in which the key term is $178 million in compensation that Country Garden will pay the banks for the return of seized collateral, the people said, asking not to be identified discussing private matters.
The committee had earlier said that failure to accept some of its demands would be a 'deal breaker.' With this hurdle cleared, the next step would be for banks to sign on to the broader restructuring deal.
Gaining the support of co-ordination committee members is crucial for Country Garden because the group holds enough of the company's debt to block its restructuring. Country Garden is under pressure to get a debt deal done, with its next winding up hearing scheduled for Aug. 11. High Court Judge Linda Chan said in May that she wanted to see 'useful and good progress' in the next hearing.
Country Garden declined to comment.
Country Garden has been in talks with creditors to restructure $14.1 billion of offshore debt since it defaulted on its dollar debt in 2023. The issue of compensation for banks releasing collateral backing certain loans has been in focus since early in the process.
To get its restructuring deal approved, Country Garden needs support from three-quarters of debt holders in two individual groups — bank lenders and bondholders. It has said that it has backing from holders of 70% of bonds, but even if it gets more from that class, it still needs bank creditors to get on board to pass the plan through a 'scheme of arrangement' procedure.
--With assistance from Emma Dong.
More stories like this are available on bloomberg.com
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