August 14, 2022

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Chinese consortium Evergrande says it has resumed 10 stalled projects

Chinese consortium Evergrande says it has resumed 10 stalled projects

A picture of the building of the Chinese consortium Evergrande in Shanghai on September 22, 2021 afp_tickers

This content was published on Oct 25, 2021 – 04:02

(AFP)

Shares in the struggling Chinese real estate consortium Evergrande rose on Monday after announcing the resumption of work on more than 10 projects as it tried to allay concerns about its debt.

The company’s liquidity crunch has dented investor sentiment and rocked the Chinese housing market, while fueling fears of contagion to the rest of the economy.

But the company, which has been mired in more than $300,000 million in debt, last week paid interest on its offshore bonds ahead of Saturday’s maturity, avoiding falling into default.

Evergrande has defaulted on many offshore bonds, and while some have a 30-day grace period, the general expectation is that they cannot meet their obligations.

In response, investors welcomed the announcement that its Shenzhen operations had “resumed work and production on more than 10 projects in six locations.”

The company’s shares rose more than 4% in morning trading.

The group had 778 projects in 233 cities in China at the end of June, according to its latest report.

Work has been suspended at some sites in recent months, while suppliers and contractors have claimed the company has not paid them.

The company has been mired in crisis since China began to take over the huge real estate sector to contain its excessive indebtedness.

But the provisions for restricting borrowing prevented the company from completing its projects.

“Since the beginning of the year, stringent regulations in the real estate market have plunged Evergrande into a whirlwind of crisis,” the company said Sunday in a statement posted on WeChat.

In another statement, he provided updates on progress on specific projects, saying that “ensuring buildings are delivered” is critical to the company’s work.

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