Country Garden gets 2.8b yuan from partner

Staff reporter

Country Garden (2007) introduced one more partner to resume the development of a commercial building in Guangzhou, involving an injection of 2.8 billion yuan (HK$3.02 billion).

The embattled developer said it needs funds to complete the project. But the asset of a subsidiary has been frozen by a higher court in Guangdong, and the property has been pledged by Country Garden for a loan of 1.7 billion yuan due next year.

Guangdong Zhongwei, focusing on supply chain business, science and technology promotion and application services, agreed to join the project. The new partner is indirectly owned by Labour Union Committee of Zhongan Tianji (Beijing) Industry Holdings.

As per the agreement, Guangzhou Zhongwei can share about 52 percent of the building units and the relevant sale proceeds.

The property is located in the Baietan Business District of Liwan District in Guangzhou. The floor area is about 209,520 square meters and is designed to be built into a 64-story high-rise commercial building with five basement floors.

The market value of the land use rights in the property was 3.1 billion yuan, according to Guangdong Tongde Real Estate Land Asset Evaluation and Planning Surveying and Mapping

The site was sold by tender for 2.5 billion yuan in 2017 to Guangzhou Jinsi Real Estate Development, which is now a subsidiary, indirectly owned by Country Garden. But the construction has been suspended amid the developer's liquidity crisis.

Elsewhere, KWG (1813) warns its net loss last year is expected to widen to as much as 19 billion yuan, up by 106 percent yearly. The developer mainly blames ongoing "unfavorable market conditions."