China Evergrande Group Chairman Hui Ka Yan vowed to ensure project delivery and debt payment, as the billionaire’s credit crisis drags into the new year.
(Bloomberg) — China Evergrande Group Chairman Hui Ka Yan vowed to ensure project delivery and debt payment, as the billionaire’s credit crisis drags into the new year.
It’s a crucial year for Evergrande to complete residential projects it pre-sold, Hui said in a Jan. 1 letter to employees, adding that construction has resumed for all of its 732 real estate sites last year.
“As long as Evergrande employees can keep construction going, resume sales and restart operations, we will repay all kinds of debt and resolve risks in the end,” according to the letter that didn’t elaborate detailed plans. “Evergrande will start a new chapter after that.”
Evergrande is facing multiple headwinds this year, as China’s economy weakens and housing demand slumps. The developer could be forced to surrender more undeveloped land parcels to local governments to help finance construction of its unfinished homes, Bloomberg Intelligence analyst Kristy Hung wrote in a report.
The world’s most indebted developer failed to come up with a “preliminary restructuring plan” it promised by the end of July. It missed another self-imposed 2022 year-end deadline as well.
The company met with an ad-hoc group of its dollar bondholders in early December to formally discuss plans, Bloomberg reported earlier. With about 1.97 trillion yuan ($286 billion) of liabilities, the company is facing a winding-up lawsuit in Hong Kong, while sitting at the heart of a property crisis that’s triggered a flurry of defaults and caused home construction halts across the country.
It expected to receive support from offshore creditors by the end of February or early March, the company’s legal representative said during a winding-up hearing in late November. Evergrande was urged by the judge of the winding-up case to present “something more concrete” during the next hearing on March 20.
Evergrande has delivered 301,000 residential units in 2022, according to the letter, meeting its target. The developer’s electric vehicle startup has started mass production and delivery of Hengchi 5, it added.
(Updates with analyst comment on Evergrande challenges. An earlier version corrects this year reference to 2022 in last paragraph)
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