(Yicai) Aug. 14 -- Shares in Country Garden plummeted today after China’s largest private real estate developer said it has suspended the trading of 11 of its Chinese yuan-denominated bonds worth CNY15.7 billion (USD2.2 billion) from today as the struggling firm enters debt restructuring.

Country Garden’s share price [HKG:2007] was trading down 17.3 percent today at HKD0.81 (USD0.10) as of 1.30 p.m. China time.

Country Garden will hold a bond holders’ meeting soon regarding bond redemption and plans to steadily implement solutions to resolve risks, the Foshan, southern Guangdong province-based firm said on Aug. 12.

The company has not suspended trading of its offshore bonds, indicating that the developer is likely to first extend the deadlines of its yuan-denominated bonds as the bulk of its debt is onshore, industry insiders said.

Of the 11 bonds, three of them, worth a total of CNY7.3 billion (USD1 billion) will mature next month.

Country Garden also has 20 offshore bonds totaling USD10 billion, per data provider Wind Information. It was unable to pay the interest on two of them that were due on Aug. 7, although there is a grace period of 30 days for bond interest payments to be made. The two bonds are listed on the Singapore Exchange and are each worth USD500 million. They will mature on Feb. 6, 2024 and Aug. 6, 2030.

China’s real estate market has been sluggish since 2021 and the financing environment has worsened. This, combined with tighter regulation, has caused Country Garden to have less available funds and to come under liquidity pressure, a company insider said earlier.

The firm is bracing for losses of up to CNY55 billion (USD7.5 billion) in the first half mainly because of poor sales and losses due to fluctuations in the foreign exchange rate, it said last week.

Country Garden will take firm action to ensure the on-time delivery of pre-sold homes, improve liquidity and ensure that its business is running in an orderly way, according to an open letter signed by Chairwoman Yang Huiyan and President Mo Bin on Aug. 11. It will spare no effort to protect the rights and interests of its clients, investors and partners.

Editor: Kim Taylor