Home NewsEconomy News China Evergrande to sell Crystal City Project for $575 million By Reuters

China Evergrande to sell Crystal City Project for $575 million By Reuters

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© Reuters. FILE PHOTO: The China Evergrande Center building sign is seen in Hong Kong, China, December 7, 2021. Reuters/Tyrone Siu

(Reuters) – China Evergrande Group said on Wednesday it would sell its Crystal City complex in the eastern city of Hangzhou for 3.66 billion yuan ($575 million) as the group’s liquidity problems hampered progress on its projects. The project was sold to two state-owned enterprises.

Evergrande said in a filing that it was selling land use rights and building ownership for projects under construction to Zhejiang Provincial Real Estate Group and Zhejiang Provincial Construction Engineering Group.

The raised funds will be used to repay the construction fee of 920.7 million yuan owed to Zhejiang Construction Engineering, and the rest will be used as its own general working capital. The transaction is expected to generate proceeds of approximately RMB 216 million.

With more than $300 billion in debt, Evergrande has struggled to pay off suppliers, creditors and complete projects. State-owned enterprises have stepped in to help with the debt restructuring process and have taken over some of their assets to calm market fears of a disorderly collapse.

In a separate filing late Tuesday, Evergrande said it had formed an independent committee to investigate how banks seized 13.4 billion yuan in deposits from its property services arm, Evergrande Property Services Group, which had been used as third parties Guaranteed Guarantee.

Evergrande said a preliminary investigation found that the relevant deposit pledge and bank enforcement occurred in 2021.

Shares in its subsidiary China Evergrande New Energy Automobile Group resumed trading on Wednesday, plunging as much as 14.5% at one point.

They have been suspended since last Monday pending word from law enforcement. But under listing rules, trading will be suspended again on Friday as the company won’t be able to release its 2021 financial results until March 31.

Shares in Evergrande and Evergrande Property have been suspended since last Monday.

($1 = 6.3602)

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