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Green is the hope?

Headquarters of the Country Garden Group in Foshan

Photo: Jade Gao / AFP

In China's simmering real estate crisis, a large and heavily indebted property developer once again has to defend itself in court against an application for winding up.

The affected company Country Garden confirmed in a stock exchange announcement on Wednesday morning (local time) that its creditor Ever Credit Limited wants to obtain this in a court in Hong Kong.

It is about an unpaid loan of 1.6 billion Hong Kong dollars (around 188.6 million euros) plus interest.

The court set the first hearing for May 17, according to Country Garden.

After the ordered break-up of the real estate developer China Evergrande, which is the world's most indebted, with the equivalent of more than 300 billion US dollars, at the end of January, an important property developer from the Middle Kingdom is once again threatened with liquidation.

The crisis in the sector, which contributes around a fifth of the country's annual economic output, is weighing heavily on the world's second largest economy.

The government in Beijing has already tried to counteract this with easing lending and a list of construction projects in which banks should invest.

A stumbling giant?

According to the Fortune.com portal, Country Garden had sales of almost 64 billion US dollars last year.

The number of employees had recently been reduced, but in 2023 it was still almost 70,000 employees.

Country Garden will “vigorously resist” the demand, said the company, which is listed on the Hong Kong Stock Exchange.

The real estate company from Foshan in southern China was once considered the largest developer by sales and is currently working on a restructuring with foreign creditors, according to a statement.

Country Garden does not expect the application to the Hong Kong court to have a “significant impact” on this trial or its timeline.

On the stock exchange in the Chinese special administrative region, the company's price temporarily slipped by eleven percent in the morning after trading opened.