Country Garden’s billionaire boss bags big payouts as default for property giant looms

HONG KONG - Country Garden Holdings bond holders are setting their sights on the company’s billionaire chairman Yang Huiyan to see if she will use her vast personal fortune to prevent what was once China’s biggest developer from defaulting.

Ms Yang, who the Bloomberg Billionaires Index estimates has a net worth of more than US$5 billion (S$6.7 billion), will get about US$28 million in dividends on Friday for her personal stake in the company’s services unit, according to Bloomberg calculations.

That is enough to cover the US$22.5 million bond payments Country Garden missed this week.

A foundation owned by her family could bag another US$35 million in cash payouts.

If she does use her own money to pay Country Garden’s debts, she would follow the lead of Mr Hui Ka Yan – founder of defaulted developer China Evergrande Group – who was pressured by creditors to dip into his pocket to back his company.

Ms Yang has collected almost US$5 billion in dividends over time from two of the listed companies controlled by her – Country Garden, which started trading in Hong Kong in 2007, and property management firm Country Garden Services Holdings, which has been trading since 2018, according to the Bloomberg Billionaires Index.

It is unknown how she has dealt with the proceeds to date.

Still, it could be a sizeable pool as the company faces a 7.8 billion yuan (S$1.5 billion) payment wall in August.

“Over the past 12 months, Country Garden has shown higher willingness to pay compared with other privately owned developers such as CIFI and Evergrande,” said CreditSights Singapore senior credit analyst Zerlina Zeng.

“However, with contracted sales continuing to tumble, it is hard to say whether it will continue to use its own funds to keep the bond holders afloat.”

In a move that spooked the market, Ms Yang in July transferred a substantial part of her personal stake in Country Garden Services, which she also chairs, to a charity foundation controlled by her sister.

UBS Group analysts said the timing was “unusual”.

Days later, the property manager brought forward the payment date of its 2022 dividends and special dividends.

Country Garden Services, the unit paying the dividends, said the payout plan, approved in May, does not relate to any “third-party factor”, in a statement to Bloomberg News.

The services company said it brought forward the dividend payment date to Friday – from Aug 30 – because it has ample cash, and it hopes to alleviate concerns about its stability.

Fortune slumps

While the billionaire keeps getting dividends, her fortune has slumped 84 per cent since its peak as Country Garden falls deeper into a debt crisis.

She now has a net worth of US$5.5 billion, down US$28.6 billion from June 2021, according to Bloomberg’s wealth index.

If the fortunes of Evergrande’s Mr Hui are any guide, she may soon have to begin dipping into her assets.

Other than the billions of dollars from dividends, the family still controls a US$2 billion stake in Country Garden, a US$1.2 billion stake in Country Garden Services and a US$20 million stake in United States-listed Bright Scholar Education Holdings through a family trust.

Rapid rise

Ms Yang’s father, Mr Yeung Kwok Keung, co-founded Country Garden in 1992 in the southern Chinese city of Foshan, and transferred a controlling stake to her in 2005 after she joined the firm as his personal assistant to learn the ropes and eventually succeed him.

The developer grew rapidly over several decades as the nation’s housing market boomed, making a name for itself in the Guangdong province bordering Hong Kong with a catchy slogan to “get yourself a five-star home”.

By age 25, the Ohio State University alumna was China’s richest woman.

She became Country Garden’s vice-chairman in 2012 and its co-chairman in 2018. In March 2023, she took over as the sole chairman after her father resigned. BLOOMBERG