Troubled China Evergrande Group (恆大集團) yesterday said that it would sell its stake in an incomplete development near Shanghai for US$576 million as it scrambles to find cash to pay its mammoth debts.
The real-estate giant is drowning in US$300 billion of liabilities, and has struggled to repay bondholders and investors after a clampdown by Beijing suddenly turned off the liquidity taps.
Yesterday, the developer said it would sell the Crystal City Project, a vast commercial zone in Hangzhou, an eastern city outside of Shanghai, for 3.66 billion yuan (US$576.4 million).
Photo: Reuters
Part of the proceeds from the sale would go to repaying construction fees of 920.7 million yuan, the company said in a filing to the Hong Kong stock exchange.
The remaining cash would be used as “general working capital of the group,” Evergrande added.
“The group’s liquidity issue has adversely affected the development and progress of the group’s projects,” it said.
On Tuesday night, the firm’s Evergrande New Energy Vehicle Group Ltd (恆大新能源汽車) unit also confirmed in a separate filing that it plans to start mass production of its first electric vehicle on June 22.
It had said on Sunday that it would start taking orders for the vehicle and open sales centers in 15 major Chinese cities, including in Tianjin, Shanghai and Guangzhou.
However, the announcement was unable to prevent the unit’s share price from plunging almost 10 percent yesterday after resuming trading.
The auto arm had halted trading on Monday last week along with Evergrande Group and Evergrande Property Services Group Ltd (恒大物業).
That came as the developer said it was looking into how lenders have laid claim to deposits of more than 13.4 billion yuan for its property services subsidiary.
However, the board of the electric vehicle unit said this “primarily concerns a sister company,” allowing its shares to restart trading.
Evergrande last week said that it would not be able to publish its audited results for last year by the end of this month — as Hong Kong’s listing rules require — blaming the delay on COVID-19.
It has repeatedly said it would finish projects and deliver them to buyers in a desperate bid to salvage its debts, and had asked creditors to give the company time.
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