Evergrande seeks $8b for Yuen Long project

Debt-laden developer China Evergrande Group (3333) is seeking to sell a residential project in the Yuen Long area of the New Territories for HK$8 billion, people familiar with the matter said, as it ramps up divestments to avert a cash crunch.

Evergrande acquired the project from Henderson Land Development Company (0012) at first by purchasing undeveloped farmland for HK$4.7 billion in mid-2019. Earlier this year, it paid a HK$4.2 billion premium to convert it into a residential development, according to the Hong Kong Economic Times.

The world’s most indebted developer is facing mounting pressure to curtail its borrowings, fueling concerns that it may rush to offload assets at a cheap price. Regulators last week issued a rare public rebuke of the company, urging it to address its debt woes. With more than US$300 billion (HK$2.34 trillion) of liabilities, the conglomerate’s fate has broad implications for China’s financial system.

“Evergrande may accelerate asset sales after last week’s rebuke and instruction to resolve its debt problems from China’s central bank and financial regulator,” Bloomberg Intelligence analysts including Patrick Wong and Lisa Zhou wrote in a note.

Previously, it reportedly clinched a deal to sell its Hong Kong headquarters building in Wan Chai to state-owned Yuexiu Property (0123) for HK$10.5 billion, less than the acquisition cost of HK$12.5 billion.

Evergrande said earlier this month that it’s in discussions to sell stakes in its electric vehicle and property services units. Last week it said preliminary talks between China Evergrande New Energy Vehicle Group and Xiaomi Corp to introduce strategic shareholders had ended.

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