Buttressing Greenland – a bailout in China’s distressed property sector
By Engen Tham and Yu Xie
15 March 2022
Greenland Holdings Corp Ltd (600606.SS), a major Shanghai-based Chinese state-backed property developer responsible for marquee projects at home and abroad, was scrambling for funds late last year, people with direct knowledge of the matter said.
In danger of defaulting on a $500 million offshore bond in December, it was rescued after Shanghai authorities told local state-owned enterprises (SOEs) to step in and buy new Greenland debt, sources told Reuters.
Greenland’s financial straits and subsequent bailout, details of which are previously unreported, mark the first known example where Chinese SOEs have been directly ordered to participate in a property sector bond offering – highlighting more active and targeted action being taken by authorities as they seek to limit risks posed by the industry.
Greenland, China’s No. 7 property developer and highly leveraged, became swept up in a sector-wide debt crisis that roiled international markets last year amid fears that a large-scale developer collapse could derail the world’s second-largest economy.
