Shares in the Chinese property giant, Country Garden Holdings Co., Ltd, hit new lows amid fears it is facing a painful debt restructuring.
Its stock, down 64% in the year to date, was off 5.8% on Friday sending reverberations across the sector. In fact, contagion dragged local indices lower.
Country Garden, known for its presence in lower-tier cities, recently forecast a potential loss of up to $7.6 billion for the first half of the year and apologised to investors for misreading market dynamics.
A recent missed payment of $22 million might push regulators towards stronger support measures, but industry experts remain sceptical about a swift sector recovery.
Reports suggest Country Garden might seek payment extensions due to cash shortages. Meanwhile, other major Chinese property developers are also navigating debt restructuring challenges.