Northwestern City Calls Out Evergrande Over Unpaid Land Transfer Dues
What’s new: A local government has publicly urged subsidiaries of China Evergrande Group to pay outstanding land transfer fees, illustrating the extent of the crisis at the debt-saddled property giant.
Some 20 Evergrande affiliates have not yet made payments to the city government of Lanzhou, the capital of Northwest China’s Gansu province, according to a list (link in Chinese) of 41 such firms issued last week by the city’s natural resources department.
The notice urged the companies to make the transactions “as quickly as possible,” without saying how much they still owe.
The background: Evergrande’s stock and bond prices have declined in recent months amid mounting concerns about its ability to repay more than 600 billion yuan ($92.8 billion) in debt and Beijing’s latest efforts to regulate its highly leveraged property sector.
The real estate conglomerate has taken drastic action in an attempt to balance its books, cutting land purchases, selling properties and offering buyers discounts of 30% to 40% if they pay for their homes in cash.
But credit ratings agencies remain doubtful that the company will be able to pay what it owes, particularly the $6 billion in offshore bonds that are set to mature next year. On Monday, S&P became the latest agency to downgrade Evergrande in the last 30 days.
Evergrande’s Hong Kong-listed shares have lost more than 40% of their value since the start of last week and are down by more than 65% from their yearly high in January. Its equities declined by 0.17% to close at HK$5.79 (74 U.S. cents) on Thursday.
Contact reporter Matthew Walsh (email@example.com) and editor Flynn Murphy (firstname.lastname@example.org)
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