DH Latest NewsDH NEWSLatest NewsNewsNEWSInternationalBusinessNewsMobile Apps

Evergrande bailout rebuffed, Beijing nudges state-owned firms to snap up assets: Report

As debt woes keep looming over Evergrande, a significant hint has emerged on what the Chinese government will do about the ailing property developer.

According to Reuters, Beijing is pressuring government-owned companies and state-backed property developers to buy Evergrande properties, in the hope of limiting the economic damage that a collapse may do. Sources told Reuters that China is unlikely to assist directly in the form of an Evergrande bailout. Instead, state-backed property developers including Vanke and China Jinmao Holdings, as well as China Resources Land, have been requested to acquire properties from Evergrande.

Local governments have also been tasked with negotiating with government-backed companies to engage in asset auctions. Some government-owned companies in Guangzhou, China’s southern metropolis, have already complete with due diligence. Guangzhou City Construction Investment Group is close to buying Evergrande’s Guangzhou FC soccer stadium as well as several neighbouring residential developments.

Also Read: Australia urges its states to end lockdowns

Evergrande is the world’s most indebted business, with $309 billion in liabilities. With approximately 1,300 real estate projects and 7.3 billion square feet of contractual land, it is China’s second-largest property developer.

Last week, markets were spooked by worries that a potential Evergrande collapse would have global ramifications and at the same time, the troubled company missed a deadline to pay $83.5 million in interest on a dollar-denominated bond. A $47.5 million coupon payment is due on Wednesday.

shortlink

Post Your Comments


Back to top button