China's Country Garden faces liquidation proceedings

• Country Garden follows on the heels of China Evergrande, the world's most indebted property developer, which was ordered to be wound up by a Hong Kong court at the end of January.

BEIJING (Feb 28): In China's ongoing property crisis, large and highly indebted property developer Country Garden is to defend itself in court against an application for liquidation, reported German news agency (dpa).

Country Garden confirmed in a stock exchange announcement on Wednesday morning that its creditor Ever Credit Limited has filed for a winding-up petition before a court in Hong Kong. The case concerns an unpaid loan totalling HK$1.6 billion (RM971.5 million) plus interest.

According to Country Garden, the court set the first hearing for May 17.

Country Garden follows on the heels of China Evergrande, the world's most indebted property developer, which was ordered to be wound up by a Hong Kong court at the end of January.

The crisis in the sector, which contributes around a fifth of China's annual economic output, is weighing heavily on the world's second-largest economy.

The government in Beijing has already tried to counteract this by easing lending restrictions and drawing up a list of construction projects in which banks should invest.

Country Garden will "vigorously oppose" the petition, the Hong Kong-listed group said.

The property company from Foshan, in southern China, was once considered the largest developer by sales and is currently working on a restructuring with foreign creditors, it said in the statement.

Country Garden does not expect the application to the Hong Kong court to have a "significant impact" on this process, or its timetable. On the stock exchange in the Chinese special administrative region, the company's share price fell by 11 per cent at times after trading opened.

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