The embattled Chinese homebuilder Country Garden stated on Wednesday it deliberate to lift $34 million by issuing new shares, its newest effort to get a deal with on its debt issues and include a deepening property disaster that’s weighing on China’s economic system.

In a submitting with the Hong Kong Stock Exchange, Country Garden stated it deliberate to subject 350.6 million shares of the corporate at 77 Hong Kong cents apiece subsequent Wednesday. The proceeds won’t go to the corporate. Instead, they’ll go to a subsidiary of Hong Kong-based Kingboard Holdings Limited, a supplies and chemical substances producers with a property division to which Country Garden owes thousands and thousands of {dollars}.

Country Garden, China’s largest property developer, is promoting the shares at a 15 p.c low cost to Tuesday’s closing value. It is teetering on the brink of default after lacking two curiosity funds earlier this month. The firm has till subsequent week to repay the offshore bondholders or it is going to be in default to collectors.

The monetary hassle dealing with Country Garden is the newest fallout from a quickly spreading actual property disaster in China.

As of 2022, Country Garden had roughly $190 billion in liabilities. Over the previous few years, a number of dozen Chinese property builders, together with a number of the sector’s largest names, have defaulted underneath the burden of debt constructed up over years of extreme borrowing.

Country Garden had managed to keep away from that destiny, however a pointy downturn in gross sales beginning just a few months in the past exacerbated its monetary issues. In addition to the missed curiosity funds, the corporate is negotiating with collectors to delay reimbursement of a Chinese bond, due later this week, till 2026.

It stated it nonetheless owed the Kingboard Holdings subsidiary round $200 million, to be paid in installments, with the ultimate fee due in December. The new shares in Country Garden signify 1.27 p.c of the corporate’s present shares.

Later on Wednesday, the corporate is anticipated to publish outcomes for the primary six months of 2023. It warned earlier this month that it anticipated to publish a lack of between $6.2 billion and $7.5 billion for these months, citing an “unprecedented difficult period” for China’s property trade.

Shares within the firm have fallen 67 p.c this yr.