Struggling property giant China Evergrande Group (恆大集團) has had a lucrative building plot in suburban Hong Kong sold off by its US receiver to cover a portion of the company’s massive debts, according to the company’s filings.
The undeveloped plot in the border district of Yuen Long was sold for nearly US$637 million, with Evergrande saying it expected to record a loss of approximately US$770 million on the land, according to a statement filed on the Hong Kong stock exchange on Sunday.
“The proceeds from such sale will be used to repay the company’s financial obligations in relation to the project,” Evergrande said.
Photo: Reuters
The Yuen Long land was first seized as security by the Los Angeles-based asset management fund Oaktree Capital Management LLC in January last year when Evergrande defaulted on US$600 million it had borrowed.
Evergrande spent more than US$1.13 billion to obtain the vast plot next to Hong Kong’s Mai Po Nature Reserve, an internationally significant wetland known as a “paradise for birds.”
The group originally proposed to develop 268 villas on the land, with a huge palace-like mansion at the center that it hoped to sell for US$510 million.
Hong Kong media last week reported that three mansions in the city’s prestigious Peak district owned by Evergrande founder Hui Ka Yan (許家印) had been seized by the China Construction Bank (中國建設銀行) and Japanese financier Orix Corp as repayment for loans.
The total market value of the three mansions was estimated to be US$318 million, according to online news outlet HK01.
The company is also looking to sell its headquarters in Hong Kong which occupies a highly sought-after patch of land on the harbor front.
Evergrande was due to unveil a restructuring plan in July, but the announcement was postponed to an unspecified date. Trading of Evergrande shares listed in Hong Kong has been suspended since late March.
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