Exclusive-China authorities ask Ping An to take controlling stake in Country Garden, sources say
© Reuters. FILE PHOTO: The logo of Ping An Insurance is seen at the Global Mobile Internet Conference at the National Convention Center in Beijing, China April 27, 2018. REUTERS/Damir Sagolj/File Photo -Chinese authorities have asked Ping An Insurance Group to take a controlling stake in embattled Country Garden, the nation's biggest private property developer, four people familiar with the plan said.
China's State Council Information Office and the Guangdong local government did not respond to requests for comment. Country Garden declined to comment. "Only equity injections, such as corporate takeovers or nationalisations, are likely to turn around the confidence of home buyers and investors and materially change the situation."Authorities are keen that any risks posed by Country Garden's liquidity problems should not spill over to the wider economy, said three of the sources.
A fifth person with knowledge of the matter said some talks between Ping An and the Guangdong local government about a rescue of Country Garden took place in September.Discussions between Ping An and authorities are being led by officials in the financial markets department of the People's Bank of China , which is the central bank, and include Country Garden, said two sources.Neither the PBOC nor the NFRA responded to Reuters requests for comment.
The property developer last month missed a deadline to pay a $15 million coupon and the market has deemed it to be in default on its offshore bonds which total some $11 billion.
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Country Garden shares rally on disputed report that Ping An was asked to buy itSteven Goldstein is based in London and responsible for MarketWatch's coverage of financial markets in Europe, with a particular focus on global macro and commodities. Previously, he was Washington bureau chief, directing MarketWatch's economic, political and regulatory coverage. Follow Steve on Twitter: MKTWgoldstein.
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