'Hengda' in Default: "We Will Build 600,000 Houses This Year... No Fire Sale of Assets"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyunjung] China Evergrande, which is in a state of default, announced that it plans to complete about 600,000 housing units this year.

On the 10th, Chinese media including Caixin reported that Xu Jiayin, chairman of Evergrande, said this at a recent internal meeting. Chairman Xu stated that although the situation has been difficult due to almost no capital inflow since last September, the company must fulfill its social responsibility.

He added that as of the end of last year, the resumption rate of Evergrande real estate development sites across China was 93.2%, but the actual work rate at each site remains low, emphasizing that the actual work rate at all construction sites must be raised to 80-90% by the end of March.

To achieve this, he insisted that the number of construction workers deployed should be increased stepwise to 100,000 by the end of February, 200,000 by mid-March, and 300,000 by the end of March. He also stated that the available funds Evergrande can mobilize for normalizing construction sites total 220 billion yuan (about 41 trillion won), including 50 billion yuan from pre-sale deposits.

Furthermore, Chairman Xu revealed that special support teams for Evergrande project completion have been established at provincial, city, and district levels of local governments in China to support the normalization of the company's business. Chinese authorities are mobilizing state-owned enterprises to take over some early-stage construction sites of Evergrande projects where stable progress is difficult.

However, no visible progress has yet been made in resolving the debt issues. At a meeting with bondholders held on the 26th of last month?the first since the default?Evergrande requested more time, stating plans to prepare a restructuring plan within six months.

At the same time, the company expressed its stance not to sell assets at fire-sale prices to resolve debt problems. Chairman Xu said at this meeting, "The company's assets must never be sold at a low price," adding, "If assets are sold cheaply to repay some debts, it may become even more difficult to repay debts afterward." As of the end of June last year, Evergrande's total debt amounted to 1.9665 trillion yuan, of which offshore dollar bonds issued totaled about 19.2 billion dollars.

This content was produced with the assistance of AI translation services.