[RAM] RAM Ratings upgrades Country Garden Real Estate to B1; outlook revised to stable

RAM Ratings has upgraded the rating of Country Garden Real Estate Sdn Bhd (CGRE or the Company)’s RM1.5 bil Islamic Medium-Term Notes Programme (IMTN or the sukuk) to B₁ from B₃. Concurrently, the long-term outlook on the rating has been revised to stable from negative.

The upgrade reflects material easing of near-term liquidity pressures and a meaningful reduction in external debts. CGRE’s deleveraging has been substantial, declining from RM1.0 bil at end of 2023 to RM191.10 mil as at end-June 2025, based on management accounts. Of the outstanding amount, RM150 mil of IMTN is scheduled for repayment in May 2026 and March 2027. Liquidity is supported by approximately RM230 mil in unrestricted cash as of mid-November 2025, as represented by management.

The stable outlook incorporates expectations that the Company will maintain steady sales performance, supporting stable operating cash flow generation. Demand for CGRE completed projects, particularly in Johor, continues to maintain strong buyer interests, allowing the Company to fund operating and debt servicing without reliance on additional shareholder support.

The rating action also considers CGRE’s parent-subsidiary linkage with its ultimate parent, Country Garden Holdings Company Limited (Country Garden or the Group). While the group’s weaker credit profile constrains CGRE’s credit strength due to strategic and legal ties, financial pressures at the parent level have moderated following a court-sanctioned restructuring of USD17.7 bil of debt, which became effective on 30 December 2025. Additionally, a winding-up petition against Country Garden has been dismissed on 16 February 2026.

As part of the restructuring, CGRE is expected to dispose of its Forest City development (via a subsidiary), to Concrete Win Limited, the Group’s major shareholder. The transaction, which is anticipated to complete by mid-2026, is expected to alleviate the need for further capital commitments to Forest City. It should materially reduce CGRE’s inventory and eliminate about RM5 bil in intercompany loans. However, the disposal is also expected to materially reduce its development pipeline and weaken CGRE’s long-term strategic linkages with the Group. As a result, the Company will become increasingly reliant on a shrinking stock of completed properties, with new launches in existing developments in Johor and Kuala Lumpur planned for end-2026.

Shareholder advances remain sizeable at RM13.64 bil as of end-December 2024. These advances do not have fixed repayment terms, and dividend distributions to shareholders, including repayment of advances, remain restricted until the IMTN is fully redeemed.


Analytical contacts
Ben Inn
(603) 2708 8290
ben@ram.com.my

Thong Mun Wai
(603) 2708 8255
munwai@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my