Country Garden, once China’s largest property developer, announced that its controlling shareholder will convert $1.14 billion of loans into equity. The move is part of an ongoing offshore debt restructuring strategy aimed at stabilizing the company’s finances.
This conversion represents a key step in a broader $14.1 billion restructuring plan agreed upon with a core group of bank creditors in August 2025. By converting loans into equity, Country Garden aims to reduce debt pressure and strengthen its balance sheet amid a challenging property market.
Shareholders are set to vote on the proposed restructuring plan on November 5, 2025. Approval would allow the company to proceed with its restructuring strategy, which is designed to maintain operations, protect creditors’ interests, and improve long-term financial stability.
The loan-to-equity conversion reflects a trend among Chinese developers facing liquidity challenges. By reducing debt through equity issuance, companies can mitigate default risks while providing creditors with ownership stakes, potentially benefiting from future growth.
Country Garden’s restructuring plan comes after a period of significant market volatility in China’s property sector. The company had faced cash flow pressures, slowing sales, and broader economic headwinds that affected many developers. The $14.1 billion plan represents one of the largest restructuring efforts in the sector.
Analysts highlight that the controlling shareholder’s willingness to convert a substantial portion of loans into equity signals confidence in the company’s future prospects. This step also aligns the interests of creditors with the long-term success of Country Garden, potentially increasing market stability.
The company has emphasized that the restructuring plan aims to protect all stakeholders, including employees, creditors, and shareholders. By addressing offshore debt obligations, Country Garden hopes to restore investor confidence and ensure smoother operations in the coming years.
Market observers are watching closely as the shareholder vote approaches. If approved, the loan-to-equity conversion could set a precedent for other developers navigating complex debt challenges. It also demonstrates a proactive approach to corporate governance and financial management in the property sector.
Country Garden’s move reflects broader trends in China’s real estate industry, where developers are exploring creative solutions to manage debt, maintain liquidity, and sustain operations. Equity conversions, debt rescheduling, and strategic partnerships are becoming common tools for companies in distress.
The announcement has been met with cautious optimism among investors and market participants. While challenges remain in the property market, the conversion plan provides a concrete step toward stabilizing one of China’s largest developers and reducing systemic risks in the sector.
As the November shareholder vote approaches, attention will focus on the company’s ability to implement the plan effectively and achieve the intended financial improvements. Successful execution could serve as a model for other developers seeking to navigate debt challenges while preserving long-term growth potential.
Country Garden’s loan-to-equity conversion is a critical moment for the company, its creditors, and the wider property market. By restructuring debt strategically, the firm aims to emerge stronger and more resilient amid ongoing industry pressures.
