Published on : 28/07/2022 – 10:14Modified : 28/07/2022 – 10:12
Hong Kong (AFP) – Struggling Chinese property developer Evergrande has found a potential buyer for its Hong Kong headquarters, according to reports on Thursday, days before the company’s expected restructuring plans were announced.
CK Asset Holdings, founded by Hong Kong billionaire Li Ka-shing, said it had submitted a bid for the 26-story building, currently valued at 9 billion HK dollars (1.07 billion euros) according to Hong Kong media .
Evergrande, the former number one in real estate in China, has been trying in recent months to sell assets and reduce its stakes in other companies, following accumulating arrears estimated at some 300 billion dollars.
To reduce the sector’s indebtedness, Beijing has gradually tightened the conditions for access to credit for developers since 2020, which has dried up the sources of financing for groups already in debt.
A wave of defaults followed, including that of the Evergrande group.
Gambling on his survival, the former Chinese number one in real estate is due to unveil the beginnings of a restructuring plan in the coming days.
In 2015, when the group acquired its headquarters for $1.61 billion, it was the largest deal for an office building in Hong Kong by price per square metre, according to local newspaper South China. MorningPost.
Last October, the building was offered to Chinese state developer Yuexiu for $1.7 billion, but the buyer pulled out due to concerns over Evergrande’s unresolved debt.
Evergrande fired its CEO and chief financial officer last week following an internal investigation into why banks seized more than $2 billion from the company’s real estate services arm.
The group’s poor financial health is penalizing its competitors as buyers are increasingly reluctant to invest in real estate.
Weakened, some developers are struggling to continue their construction sites and to deliver housing units sold before their construction in due time.
In retaliation, exasperated owners refuse to pay monthly installments to promoters, contributing to aggravate the crisis in the sector.
Analysts believe that if the crisis spreads to China’s financial system, the shock might be felt far beyond its borders.
Contacted by AFP, Evergrande was not immediately available for comment.
© 2022 AFP
