Country Garden Services distances itself from former parent company amid rising liquidity concerns
- Country Garden Services seeks ‘market-oriented operations’ through ‘our own independence and isolation’, says CFO Huang Peng
- Chinese developer Country Garden will not issue US dollar convertible bonds amid ‘unsuitable market conditions’
Country Garden Services Holdings is distancing itself from the liquidity woes surrounding its former parent Country Garden, saying it will not serve as a financing tool for China’s largest developer.
Country Garden, meanwhile, said on Monday that it had dropped its US dollar convertible bond issue because of “unsuitable market conditions”.
Hong Kong-listed CG Services, one of the largest property services providers in China, said it was seeking to increase efforts in “market-oriented operations” and make it financially independent from Country Garden to balance its growth.
Country Garden span off the services unit in 2018, at which point it ceased to be a subsidiary of the developer. However, the two entities remain linked because Country Garden Services is controlled by Yang Huiyan, the co-chair of the group and daughter of the founder Yang Guoqiang.
“Through management and control on capital [exchanges] with the group [Country Garden] and through our own independence and isolation, we can balance our business momentum,” Huang Peng, chief financial officer of Country Garden Services, said during a briefing with investors on Monday.
03:02
Chinese real estate giants Evergrande and Kaisa continue unloading assets to cover debt
Investors are worried that the liquidity crisis affecting Chinese developers could spread to stronger companies like Country Garden, the largest player in China’s US$1.7 trillion property market. Any problem with its ability to service debt could spill over to other peers and affect China’s already slowing economy.
