Evergrande resumes work on projects in southern China
Evergrande, the Chinese real estate developer struggling with high debt, said he had resumed work on a handful of projects in the Pearl River Delta in southern China as he sought to reassure investors anxious.
The announcement came after Evergrande made an $ 83.5 million interest payment on one of its offshore bonds it defaulted in September, state media reported on Friday.
In a post on the company’s WeChat social media account on Sunday, Evergrande posted photos of workers on projects in at least nine southern cities, noting that some had even completed construction. Some of the time-stamped photos of projects in Guangdong province showed traders painting the interiors of apartments.
“The on-site construction is proceeding smoothly, safely and in an orderly fashion,” the company said in the statement. Evergrande is based in Shenzhen, across the border from Hong Kong in Guangdong.
In a filing on Aug.31, the company said it has suspended construction on a number of its hundreds of projects, many of which have been fully sold, without providing details. The company cited delays in payments to vendors and construction charges for shutdowns.
He added that if work is not resumed, “there could be risks of depreciation of projects and impact on the group’s liquidity”.
Chinese buyers are increasingly concerned about the situation, and at least two local governments have taken control of Evergrande’s sales revenue.
Friday’s report on the bond payment was just days before the end of a 30-day grace period that would have resulted in a formal default. A bondholder then confirmed to the Financial Times that he had received the payment.
The first missed payment on September 23 sparked volatility in international markets and global fears about the health of China’s real estate sector, which contracted in the third quarter, according to data released last week. In recent weeks, other smaller developers have defaulted on their debts.
During weeks of uncertainty, advisers to Evergrande’s bondholders had complained that they had not received any “significant commitments” from the company.
At the end of June, the group’s total land reserves covered 778 projects in 223 cities in China. Its total liabilities were over $ 300 billion.
The government has given no indication it will back Evergrande, with the People’s Bank of China blaming the company for its woes earlier in October and saying any spillover into the financial system was “controllable.”
Additional reporting by Joe Rennison in New York