Evergrande races to restart projects as debt repayments loom

Beijing

CHINA Evergrande Group said it has resumed construction at most of its housing projects as authorities push the debt-laden developer to pay migrant workers and deliver apartments.

Nearly 92 per cent of Evergrande's property projects have so far restarted, compared with just about 50 per cent at the beginning of September, said a company statement released on Sunday (Dec 26). The number of workers involved in the projects that have resumed building has risen 31 per cent from September to 89,000.

"As long as we do a good job in restarting work, production and construction, we'll be able to deliver houses to buyers, resume sales and operations and pay off debts at all costs," the statement cited chairman Hui Ka Yan as saying at a company meeting.

Evergrande is struggling with more than US$300 billion in liabilities as a government campaign to deleverage developers and curb years of housing speculation takes a toll. Already labelled a defaulter after missing coupon payments on 2 bonds, Evergrande is facing a maturity wall next year and has said it plans to "actively engage" with offshore creditors on a debt restructuring plan.

Concerned that a deepening industry crisis would hurt economic growth and undermine social stability, Beijing has started to ease financing for some developers as well as homebuyers.

Evergrande's overhaul is now being guided by a risk committee that includes officials from its home province of Guangdong. In a quarterly monetary policy statement released on Saturday, China's central bank pledged greater support for the economy while reiterating its aim to promote the property sector's "healthy" growth, protect homebuyers' rights, and better meet housing demand.

Wang Menghui, minister of housing and urban-rural development, said in a weekend interview with state TV that the government will make efforts to stabilise land and housing prices and ensure reasonable demand. Still, he also emphasised that housing policy won't be used as short-term economic stimulus.

Evergrande must "sprint at full speed" to meet the goal of delivering 39,000 apartment units this month, Hui said in the statement posted online. The target is almost 4 times the firm's average monthly delivery of under 10,000 units since September, said the statement.

Thus far, more than 80 per cent of Evergrande's business partners such as renovation companies and long-term material suppliers have resumed cooperation with Evergrande, Hui said. BLOOMBERG