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China Evergrande Pledges to Finish At Least 31 Projects

Beleaguered developer has sought to ease investor anxiety by announcing that work on further unfinished sites has resumed.


Residential towers are seen at a building site of Evergrande Cultural Tourism City, where work has halted, in Suzhou, Jiangsu province. Photo: Reuters

 

Shares in China Evergrande Group held steady on Wednesday, as the beleaguered property developer said it would finish work on 31 Pearl River Delta properties by year-end, according to Chinese media reports.

The property company’s stock rose as much as 0.4% in early afternoon trading in Hong Kong to HK$2.55. The shares have lost more than 80% of their value in the year to date.

While China Evergrande Group is reeling under more than $300 billion in liabilities, Chinese media reported that its executives had pledged to complete 40 projects by June 2022, including 31 by December 31.

On Monday the developer sought to ease investor anxiety by announcing that work had resumed on more than 10 residential projects in six Guangdong province cities.

In a WeChat post, the embattled builder said construction was proceeding at developments in Shenzhen, as well as in Dongguan, Jiangmen, Shanwei, Zhuhai and Zhongshan.

 

‘Best Shot’

Tommy Wu, lead economist at Oxford Economics, said a revival of home sales could be the cash-strapped developer’s best shot at easing its massive debt overhang.

China Evergrande averted a costly default last week with a last-minute bond coupon payment, buying it more time to head off a looming debt crunch with its next major payment deadline on Friday.

Shares in China Evergrande Group‘s electric vehicle (EV) unit rose as much as 4% on Wednesday, extending gains from the previous day as the cash-strapped developer said it would prioritise the growth of its EV business.

One analyst warned that China faces a substantial risk of a hard landing if current policies are not eased over a bailout for Evergrande’s international creditors.

“Our below-consensus forecast for China’s 2022 [gross domestic product] leads us to expect significant monetary and fiscal easing … though we do not expect a bailout for Evergrande’s offshore financial creditors,” Robert Tipp, chief investment strategist, at PGIM Fixed Income in New York, said.

 

• By George Russell.

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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