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China Courts Freeze Evergrande Assets Over Missed Payments

State-owned Shanghai Construction cites Guangzhou Intermediate People’s Court rulings that $157m of assets be frozen, including bank deposits and real estate


China Evergrande
Bond defaults by China Evergrande Group, the world's most indebted developer with some $300 billion in liabilities, as well as other developers, have seen authorities soften their initial stance that market forces would hold sway. File photo: AFP.

 

A Chinese court has ordered the freezing of 640.4 million yuan ($101 million) in assets held by a subsidiary of China Evergrande Group, according to a filing by contractor Shanghai Construction Group.

State-owned Shanghai Construction, which sued the Evergrande unit in the southwestern city of Chengdu in December for overdue construction fees, cited the Guangzhou Intermediate People’s Court ruling that the assets to be frozen will include bank deposits and real estate.

Separately, Shanghai Construction Group said last week a local court in Guangzhou has frozen 361.5 million yuan of assets of a different Evergrande unit in the central province of Jiangsu for overdue payments.

Many suppliers and contractors have launched legal actions against Evergrande, the world’s most indebted property developer with over $300 billion of liabilities, over missed or late payments.

A growing number of construction and decoration companies are also writing off assets or issuing profit warnings as debt woes at Evergrande and other property developers debilitate their suppliers.

To better oversee and manage the debt restructuring of Evergrande by the authorities, all lawsuits against the developer across the country have been centrally handled by the Guangzhou Intermediate People’s Court since around August.

Evergrande declined to comment on the lawsuit with Shanghai Construction Group.

Company chairman Hui Ka Yan told an internal meeting earlier this month the firm aimed to fully restore construction work across China in February, compared with 93.2% at the end of last year, with a goal of delivering 600,000 apartments in 2022.

He added the firm needs to clear its debt by fully restoring construction and sales activities and not by selling off assets on the cheap.

 

  • Reuters with additional editing by Sean OMeara

 

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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