Officially file a liquidation petition against Country Garden! What is the origin of this company？

National business daily News: On February 28th, Country Garden announced on the Hong Kong Stock Exchange that the company was informed of the liquidation petition filed by Ever Credit Limited to the High Court of the Hong Kong Special Administrative Region on February 27th, concerning the unpaid term loan with principal of about HK$ 1.6 billion between the petitioner (lender) and the company (borrower) and accrued interest. The company will strongly oppose the petition.

According to the announcement, the presentation of the petition does not mean that the petitioner can successfully liquidate Country Garden. As of the date of announcement, the High Court has not issued a winding-up order to wind up the company. The High Court has set May 17, 2024 as the date for the first hearing of the petition.

Country Garden responded to the national business daily reporter, saying that the company is firmly opposed to the petition, and will seek legal advice, take all necessary actions, and actively and properly defend with the consulting team. At present, all the operations of our company are normal, and we will continue to take ensuring delivery and operation as the main objectives to protect the rights and interests of all stakeholders, including house owners, creditors, investors and employees, to the greatest extent.

In fact, on February 1st, there was market news that Country Garden was facing the creditors’ application for liquidation and the Hong Kong bank took over the mortgaged assets. At that time, Country Garden responded that the rumor was not true.

The amount of debts involved in liquidation is very low.

The reporter learned that the petitioner behind the liquidation of Country Garden is the listed company Jiantao Group (HK00148) in Hong Kong. The business scope of Jiantao Group covers the development of copper-clad panels to printed circuit boards, chemical products and real estate, and started in Shenzhen at the earliest.

Country Garden said that the debt amount of the company involved in Jiantao Group accounts for a very low proportion of the overall interest-bearing liabilities abroad, and the radical action of a single creditor will not have a significant impact on the company’s security, normal operation and overall restructuring of overseas debts.

Referring to the cases of other listed real estate enterprises in the industry, it is more common for individual creditors to apply to the Hong Kong court for company liquidation. Previously, a number of enterprises listed in Hong Kong have been petitioned by creditors for liquidation, including Fantasia, Sunshine City, Xinli Holdings, Jiayuan International, Sunac, Xiangsheng, Longguang, Zhongliang, Dafa, Kaisa, Hellenborg and Hongyang.

Among them, Sunac, Xuhui, Fantasia, Longguang, Xiangsheng and other housing enterprises have withdrawn their liquidation petitions or related petitions through communication with creditors, which have been rejected by the court.

"Since it was announced that all overseas debts could not be repaid as scheduled, the company has hired financial and legal consultants to assist in evaluating the capital structure and liquidity of the Group and formulating overall solutions. At present, an effective communication mechanism has been established with the representative groups of major overseas creditor groups, and the overall restructuring of overseas debt is being actively and orderly promoted. All parties firmly believe that the liquidation of the company is the result of all parties losing. "

Country Garden also pointed out that the company will continue to actively negotiate, communicate and cooperate with major overseas creditor teams to seek the best solution. At present, all the operations of Country Garden are normal, and we will continue to focus on ensuring delivery and operation, and protect the rights and interests of all stakeholders, including house owners, creditors, investors and employees, to the greatest extent.

What is the origin of Jiantao Group?

Official website shows that the total construction area of residential and commercial properties developed by Jiantao Real Estate exceeds 6 million square meters, mainly distributed in Shanghai, Kunshan, Guangzhou and other cities. After 10 years’ development, its developed properties have brands such as "KB Jiantao Plaza" commercial department and "Yu Garden" residential department.

In December 2009, Shanghai Yu Garden Project invested and developed by Kunshan Guorui Real Estate Co., Ltd. was officially pre-sold in Kunshan, Jiangsu Province, which was the first residential development real estate project of Jiantao Group.

According to the Guangdong Political Consultative Conference Network, the founder of Jiantao Group is Leslie Cheung, the contemporary king of copper foil and chairman of the board of directors of Hong Kong Jiantao Chemical Group. Since 1998, he has been a member of the Federation of Hong Kong Industries, a member of the Hong Kong General Chamber of Commerce, a member of the parts executive committee of the Hong Kong Productivity Council and a director of the Hong Kong Chamber of Commerce and Industry. In 2006, he was elected as the Standing Committee of Guangdong Provincial Political Consultative Conference.

The dispute between Jiantao Group and Country Garden began in October last year.

At that time, Jiantao Group announced that Country Garden (as a borrower) had failed to repay Jiantao Group about HK$ 1.598 billion according to the financing agreement, and had to repay the last installment in December 2023, and issued a statutory demand for debt repayment to Country Garden.

According to the previous announcement of Jiantao Group, on December 1, 2021, Forever Credit Co., Ltd. (the lender), a wholly-owned subsidiary of Jiantao Group, entered into a financing agreement with Country Garden to lend a term loan of HK$ 1.88 billion.

In August last year, Country Garden offset part of the funds of Jiantao Group by "debt-to-equity swap", involving debts of about HK$ 270 million. Together with the previously repaid part, Country Garden had repaid a total of HK$ 589 million at that time, and the remaining loan principal and interest balance was about HK$ 1.598 billion.

On February 19th this year, the performance warning issued by Jiantao Group showed that the company expected to record a net profit of no less than HK$ 2.02 billion in 2023, a year-on-year decrease of no more than 45%. The reasons for the decline in net profit are the decrease in the market sales unit price of copper-clad panel products and chemical products, the provision for credit losses from Country Garden loans, and the provision for impairment losses from holding unsold residential properties in East China.

The reporter learned that in addition to Country Garden, Jiantao Group also had financial ties with R&F Properties. In 2018 and 2020, Kingboard publicly subscribed for the US dollar bills of R&F Properties twice.

On February 28, Country Garden fell more than 10% in intraday trading, and its market value has fallen below HK$ 20 billion. Jiantao Group fell more than 4%.

Original title: Officially file a liquidation petition against Country Garden! What is the origin of this company?

Editor: Rao Zhimei Editor: Wu Zhonglan Audit: Feng Fei