(Yicai) Aug. 9 -- Shares in Country Garden Holdings plunged as much as 8.8 percent today after the cash-strapped Chinese real estate developer was reported to be unable to pay the interest on two US dollar bonds on schedule.

Country Garden’s share price [HKG:2007] was trading down 4.4 percent at HKD1.08 (USD0.14) as of 12 noon China time. Earlier in the day it sank to HKD1.03. Yesterday it plummeted 14.4 percent.

The prices of several of its bonds also sank yesterday. 19 Country Garden 03 [SHA:163015] which will be due in November, had the sharpest fall, plunging 27.3 percent to CNY29.81 (USD4.13).

Country Garden failed to pay interest on two bonds that was due on Aug. 7, The Paper reported yesterday. The two bonds, with the code names XS2210960022 and XS2210960378, are listed on the Singapore Exchange and are each worth around USD500 million. They will mature in February 2026 and August 2030, respectively.

China’s real estate market has been sluggish since 2021 and the financing environment has worsened. This, combined with tighter regulation, has caused Country Garden to have less available funds and to come under liquidity pressure, the report said, citing a company insider.

Country Garden’s liquidity crisis is not unexpected, an industry insider said. There were rumors swirling earlier this month that a local government team had been sent to the company’s headquarters to ask for a list of marketable assets, but the Foshan, southern Guangdong province-based firm refuted the rumor.

Country Garden has 19 domestic bonds, one of which, worth CNY1.4 billion (USD194 million), will be due tomorrow but it has been redeemed ahead of schedule. The firm also has 20 overseas bonds totaling USD17.1 billion. One of them worth USD400 million will mature in October.

And the outlook does not look good. Country Garden is expecting to make a loss in the first half, the company said on Aug. 1 without saying how big the deficit will be. Sales plunged 60 percent in July from a year ago and 24 percent from the previous month to CNY12.1 billion (USD1.7 billion), according to its latest business data.

Editors: Dou Shicong, Kim Taylor