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China Evergrande Owes $28m For Changchun Land Deal

Struggling real estate giant failed to pay nearly $150 million of coupons on three bonds due on Monday, after missing two other bond payments in September

The Evergrande logo is seen outside the China Evergrande Centre in Hong Kong. Photo: Reuters.

 

Ailing property developer China Evergrande Group owes the equivalent of $28 million for land in the northeastern city of Changchun it bought in June, its municipal authorities have revealed. 

Evergrande bought the land through local developer Changchun Jitao Real Estate Development Co for 601 million yuan ($93 million) in an auction on June 17, part of a series of coordinated sales by 22 of China’s biggest cities. 

Evergrande, which did not respond to a request for comment, has been strapped for cash with over $300 billion in liabilities. 

 

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It failed to pay nearly $150 million worth of coupons on three bonds due on Monday, after missing two other bond payments in September.

The local developer paid a deposit of 120.3 million yuan but has yet to fully make the next round of payment equal to 50% of the transaction price, the Changchun Natural Resources and Planning Bureau said in a statement. 

Changchun Jitao Real Estate was required to pay the 50% within 30 days of the sale, but has only paid 20%, the bureau said. 

It still owes about 180 million yuan ($28 million), Reuters calculations show. 

 

Full Payment Urged

Changchun Jitao Real Estate has been urged to make the 50% payment in full, the bureau said in a statement dated October 11. 

Payment for the rest of the deal is not due yet, it said. 

The plot of land, measuring 116,519 sq m (28.8 acres), is the only piece of land that Evergrande has bought this year in auctions conducted by 22 cities, which include Beijing and Shanghai, according to a Reuters analysis of public notices.

 

  • Reuters with additional editing by Sean O’Meara 

 

Read more:

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If Evergrande Defaults, What Can Its Offshore Creditors Do?

 

Sean OMeara

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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