By Clare Jim and Xie Yu
HONG KONG (Reuters) -A Hong Kong court on Monday adjourned a hearing into a petition seeking liquidation of Country Garden until Jan. 20, 2025, giving a breather to the embattled Chinese developer which is trying to finalise an offshore debt revamp plan.
Ever Credit Limited, a unit of Hong Kong-listed Kingboard Holdings, filed the liquidation petition against Country Garden in February for non-payment of a $205 million loan.
The developer defaulted on its $11 billion worth of offshore bonds last year.
A lawyer for Country Garden told the court on Monday that the developer expected to publish offshore debt restructuring term sheets to creditors in September, and that it planned to seek approval from the court on that arrangement early next year.
The hearing into Country Garden's liquidation petition comes against the backdrop of Chinese authorities stepping up efforts to revive the property sector after it slipped into an unprecedented debt crisis in mid-2021.
Over the last couple of years, a growing list of developers have defaulted on their offshore debt repayment obligations.
Many are facing liquidation lawsuits filed by creditors, with the latest being state-backed Sino-Ocean Group. A handful, including sector giant China Evergrande (HK:3333) Group, have been ordered to be liquidated so far.
In the Monday hearing, Country Garden's lawyer, Jose-Antonio Maurellet, said the company's offshore debt restructuring is a complicated and large-scale exercise but it is making "substantial progress" with weekly and by-weekly meetings between the company and advisors to creditors.
A bank lender group and a bondholder group also supported Country Garden's application for an adjournment of the hearing to allow the company to carry out the expected restructuring timeline.
If Country Garden is able to present a debt restructuring proposal to its offshore creditors and get their approval for implementing it, the developer could then push back against the liquidation petition.
A liquidation order against Country Garden would worsen the outlook for China's property sector, which policymakers are struggling to revive despite waves of stimulus measures since 2022.
Shares of Country Garden in Hong Kong have been suspended from trading since April 2, pending the release of its 2023 financial results.
Maurellet told the court the developer currently has over 40,000 full time employees and 3134 ongoing projects, of which 3,103 are in mainland China.