Country Garden had total liabilities of $190 billion at the end of June
Ping An, China’s second-biggest insurance group, has denied being asked by the Chinese government to rescue beleaguered property group Country Garden.
A report from Reuters this morning suggested talks had been going on since August about a state-engineered restructuring of the property developer that would see Ping An take a controlling stake.
In a statement, the insurance group stated it has not been asked to take over Country Garden.
We categorically deny this story. It is untrue, Ping An stated in response to Reuters, which had quoted unnamed sources for its story.
Shares in Country Garden and other listed Chinese property groups rallied strongly on the report, which was published just prior to the Asian markets close.
Chinese authorities are concerned that a run of property firm failures would spill into major damage to the economy overall.
Analysts proposed an equity-led rescue by Ping An of Country Garden would be a big boost to confidence in the short term but questioned how long the effect would last.
Last month, CountryGarden, which has over 3,000 projects under development in China, missed a deadline to pay a $15 million interest call and is considered in default on its overseas bonds.
Country Garden had total liabilities of 1.4 trillion yuan ($190 billion) at the end of June.
Reuters noted that Ping An, which is UK bank HSBC’s largest shareholder, has been used before by China to bail out struggling companies, notably the rescue of Peking University Founder Group in 2021 and 2022.
Shares in Ping An dropped over 5 per cent.