Country Garden shares drop 5% after reporting it scrapped $300 million share sale

Hong Kong-listed shares of Country Garden fell 5.06% on Tuesday, following multiple reports that the Chinese real estate developer had scrapped its $300 million primary share placement.

The share placement was aimed at helping the Chinese property developer repay its debt.

Its property services arm Country Garden Services lost 0.57%, while other Chinese property stocks were also dragged down. The Hang Seng Mainland Property Index, which measures Hong Kong-listed Chinese property counters, was lower by 0.33%.

Logan Group fell 4.21%, while China Vanke shed 0.73%. Sunac fell around 2%.

In another setback for China’s embattled property sector, Country Garden reportedly canceled its share placement shortly after midnight, according to IFR which first reported the news, citing bookrunner JPMorgan.

Primary share placements involve buying of new shares through new issuances. According to Reuters, the placement comprised of 1,800 million company shares at HK$1.30 per share — which represented a 17.7% discount to the closing price on Monday.

Country Garden is one of the largest property developers in the mainland.

Just last week, JPMorgan downgraded Country Garden and Country Garden Services to underweight, and more than halved the target price of Country Garden and its property services listing.

China’s property sector is grappling to recover from a credit crisis following the government’s crackdown on its debt levels in 2020.

— CNBC’s Clement Tan contributed to this report.