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% of Evergrande’s property projects have so far restarted, compared with just about 50% at the beginning of September, and the number of workers involved in the projects that have resumed building has risen 31% 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”, Chairman Hui Ka Yan said at the company meeting.
Evergrande is struggling with more than 300 billion dollars in liabilities as the government campaign to deleverage developers and curb years of housing speculation takes a toll. Already labeled a defaulter after missing coupon payments on two 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.
Beijing started easing financing for some developers as well as home buyers amid concerns that deepening the industry crisis would hurt economic growth and undermine social stability. 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 home buyers’ rights, and better meet housing demand.
Wang Menghui, minister of housing and urban-rural development said in a weekend interview with the state TV that the government will make efforts to stabilize land and housing prices and ensure reasonable demand as he emphasized that housing policy won’t be used as a 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, which carries a picture of him dressed in a gold tie and black suit addressing colleagues. The target is almost four times the firm’s average monthly delivery of under 10,000 units since September.
Hui said more than 80% of Evergrande’s business partners such as renovation companies and long-term material suppliers have resumed cooperation with Evergrande.
Evergrande’s troubles haven’t fully ended because it has 7.4 billion dollars of local and offshore bonds due in 2022. it faces about 255 million dollars in coupon payments on two-dollar notes on Tuesday, most of its offshore dollar bonds are trading below 23 cents on the dollar.
Shares of Evergrande have tumbled 90% in Hong Kong trading this year. The city’s stock market was closed Monday for a holiday.