China Evergrande shares rise on vow to boost unit construction

[HONG KONG] Shares in China Evergrande Group jumped more than 8 per cent on Tuesday (Dec 28) morning after the embattled property developer said it had made initial progress in resuming construction work.

Company chairman Hui Ka Yan vowed in a meeting on Sunday (Dec 26) to deliver 39,000 units of properties in December, compared with fewer than 10,000 in each of the previous 3 months.

Evergrande, grappling with over US$300 billion in liabilities and at risk of becoming China's biggest ever default, has been scrambling to raise cash by selling assets and shares.

The firm missed a deadline to pay offshore coupons worth US$82.5 million earlier this month, threatening to trigger cross-default on its roughly US$19 billion of international bonds.

Fitch and S&P downgraded Evergrande to "restricted default" and "selective default" respectively following the missed payment.

Evergrande has new coupon payments worth US$255 million due on Tuesday for its June 2023 and 2025 notes.

As of 2 am GMT, Evergrande shares were trading up 7.4 per cent at HK$1.59, a 1-week high, while the Hang Seng Index eased 0.4 per cent.

REUTERS