In the face of the deep adjustment of the real estate industry, it is time to repay what real estate companies once owed. The recent situation of Country Garden reminds me of Evergrande Real Estate last year.
What's wrong with Country Garden, will this be more serious than Evergrande?
Let's turn the clock back to February 27th, which must be a memorable day for Country Garden.
On this day, Country Garden's creditors formally filed an application for winding-up of Country Garden with the High Court of Hong Kong.
One stone stirred up a thousand waves, which made the public talk about what happened to Country Garden, and the owners who had bought Country Garden houses were on pins and needles.
According to Country Garden's announcement, this matter was unfolded in front of people's eyes, and the company's creditor, Kingboard Group, filed a winding-up petition with the High Court of Hong Kong, involving an amount of about HK$1.6 billion.
HK$1.6 billion may only be the value of a building in Country Garden, can it stump the supergiant of Country Garden?
Subsequently, in the face of this winding-up application, Country Garden responded, "The company will vigorously oppose the petition". At present, the company's operations are normal, and it will continue to ensure delivery and operation as the main work objectives, and protect the rights and interests of all stakeholders, including property owners, creditors, investors and employees, to the greatest extent.
This response is to calm the panic in the market, but it is difficult to stop the sharp fall of Country Garden**.
Country Garden's response to this is not only like this, the time came to March 4, Country Garden held a monthly group management meeting, and Yang Huiyan responded to everyone's concerns again.
Ms. Yang said the company's founders and shareholders had never wanted to lie flat. The company should actively strive for the support of the first and financial institutions, and strive to let the company complete the closed loop of funds to ensure delivery and operation.
The deep reason for Country Garden's predicament is that in the face of the challenges of the real estate industry, the value of the real estate held by Country Garden is facing a sharp contraction, and if it cannot be realized in a short period of time, the longer it drags on, the lower the value that may be realized.
The root cause of the current predicament is the evil consequences caused by Country Garden's highly leveraged operation in the past, once the market shrinks, Country Garden is likely to have a broken capital chain and become insolvent. This is the same situation as Evergrande at the beginning.
Country Garden's current total debt is as high as 13 trillion yuan, which is really astronomical.
This winding-up petition incident is undoubtedly a wake-up call for the real estate industry, and it is a warning for all real estate companies, the pursuit of high turnover in the real estate market in the past has allowed real estate companies to achieve rapid expansion, but if they do not make adjustments in the future, it is a dead end.