Troubled China Evergrande promises to repay its debt in 2023

China Evergrande has pledged to repay its debt this year as the real estate giant faces a restructuring following Beijing’s crackdown on excessive borrowing and rampant speculation in the real estate sector.

In an email seen by AFP, chairman Hui Ka Yan told staff that “2023 is a key year for Evergrande to live up to its corporate responsibilities and do everything in its power to ensure construction projects are carried out.”

“As long as everyone at Evergrande pulls together, never gives up, (and) works hard…we will surely be able to complete the tasks, guarantee deliveries, repay all kinds of debts and solve risks,” Hui wrote.

The company resumed work on 732 construction sites last year and delivered 301,000 housing units to homebuyers, the statement said.

The staff “endured tremendous physical and mental stress and overcame countless difficulties to realize the impossible,” Hui wrote.

Evergrande has rushed to divest assets in recent months and has been involved in restructuring talks after racking up around $300 billion in liabilities.

The company embodies a broader crisis in China’s real estate sector, which accounts for around a quarter of the country’s gross domestic product.

Major developers, including Evergrande, have failed to complete housing projects, sparking protests and mortgage boycotts from homebuyers.

And smaller businesses have defaulted on loans or had trouble raising cash since the government introduced tighter lending restrictions in 2020.

In November, an official document showed that Evergrande had sold land earmarked for its headquarters in Shenzhen’s southern technology hub for $1 billion.

In the same month, China’s banking regulator and central bank enacted new measures to promote the “stable and healthy development” of the real estate industry.

These include loan support for indebted developers, financial support to ensure projects complete and support for deferred payment loans for homebuyers.

© 2023 AFP

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