Evergrande resumes work on projects in southern China – News Couple

Evergrande resumes work on projects in southern China

Evergrande, the Chinese property developer battling high debt, said it has resumed work on a handful of projects across the Pearl River Delta in southern China as it sought to reassure anxious investors.

The announcement came after Evergrande made an interest payment of $83.5 million on one of its offshore bonds it missed in September, state media reported Friday.

In a post on the company’s WeChat social media account on Sunday, Evergrande posted photos of workers on projects in at least nine southern cities, confirming that some had even finished construction. Some of the time stamped pictures of projects in Guangdong Province were of merchants painting the interiors of apartments.

“Construction on site is proceeding smoothly, safely and in an orderly manner,” the company said in the statement. Evergrande is headquartered in Shenzhen, located across the border from Hong Kong in Guangdong Province.

The company said in a filing on August 31 that it had halted construction on a number of its hundreds of projects, many of which were sold out entirely, without providing details. The company reported delays in payments to suppliers and construction fees due to the strike.

It added that if work is not resumed, “there may be risks of depreciation in the value of the projects and an impact on the liquidity of the group.”

Chinese home buyers are becoming more and more concerned about the situation, and at least two local governments have taken control of Evergrande sales revenue.

Friday’s report that the bonds would be repaid just days before the end of the 30-day grace period would have triggered an official default. One of the bondholders later confirmed to the Financial Times that they had received the payment.

The missed initial payment on September 23 sparked volatility in international markets and global concerns about the health of China’s real estate industry, which shrank in the third quarter, according to data released last week. Other smaller developers in recent weeks have defaulted on their debts.

During weeks of uncertainty, advisors to Evergrande bondholders complained that they had not received “meaningful input” from the company.

As of the end of June, the group’s total land reserves covered 778 projects in 223 cities in China. It had total liabilities of more than $300 billion.

The government has given no indication that it will back Evergrande, as the People’s Bank of China earlier in October blamed the company for its problems and said any fallout to the financial system was “controllable”.

Additional reporting by Joe Rennison in New York

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