Evergrande, the world’s most indebted developer, struggles to repay more than $ 300 billion in liabilities, including nearly $ 20 billion in international market bonds that were deemed to be cross-defaulted by rating agencies on last month after missing payments.
The real estate developer missed new coupon payments worth $ 255 million due last Tuesday, despite both having a 30-day grace period.
The company has set up a risk management committee with many members of state-owned companies, and said it will actively engage with its creditors.
Local media reported this weekend that a municipal government on the Chinese resort island of Hainan ordered Evergrande on December 30 to demolish its 39 residential buildings within 10 days, due to illegal construction.
The buildings spanned 435,000 square meters, the reports added, citing an official notice at the Evergrande unit in Hainan.
Evergrande did not respond to a request for comment on Hainan’s development.
On Friday, Evergrande reiterated its intention to reimburse investors in its wealth management products, saying every investor in its wealth management product could expect to receive 8,000 yuan ($ 1,257) per month as payment. principal for three months, regardless of the maturity date of the investment.
This decision highlights the tightening of liquidity at the property developer.
“The market is monitoring the progress of Evergrande’s asset divestiture to repay its debt, but the process will take time,” said Conita Hung, director of investment strategy at Tiger Faith Asset Management.
“And the demolition order in Hainan will hurt the little homebuyer confidence that remained in the business.”
Evergrande said last week that 91.7% of its nationwide projects have resumed construction after three months of effort. Many projects have been halted before after the developer failed to pay his many suppliers and contractors.
Evergrande shares fell 89% last year, closing at HK $ 1.59 on Friday.
Its EV China Evergrande New Energy Vehicle Group unit reversed its initial losses to rise 6% late Monday morning, while property management unit Evergrande Services fell 3%.