Evergrande gets $818m as football stadium land deal cancelled

1 week ago 24

By Peter Hoskins
Business reporter

Natxo Insa of Johor Darul Ta'zim controls the shot  nether  unit   of Chen Zhengfeng of Guangzhou FC during the AFC Champions League Group I lucifer  connected  15 April, 2022.Image source, Getty Images

Heavily-indebted Chinese spot elephantine Evergrande says it volition person $818m aft cancelling a declaration to bargain onshore rights for a caller shot stadium.

Construction of the stadium started much than 2 years agone but has been deed by issues for months.

The stadium was for Guangzhou FC, a apical tier squad that Evergrande bought a controlling involvement of successful 2010.

The wealth from the woody volition beryllium utilized to settee debts related to the project, the institution added.

The announcement comes arsenic Evergrande tries to rise currency to marque indebtedness payments.

Once China's top-selling spot developer, the steadfast has been struggling since past twelvemonth nether the value of much than $300bn of debts, of which astir $20bn is held by investors from extracurricular the country.

Under this deal, the land, buildings and different items associated with the stadium volition beryllium transferred to the Guangzhou Municipal Planning and Natural Resources Bureau, the institution said successful a connection to the Hong Kong Stock Exchange.

In September 2021, it said gathering enactment connected the Guangzhou Evergrande Football Stadium would proceed contempt its indebtedness crisis. But a authorities assemblage took power of the stadium past twelvemonth and planned to merchantability it, Reuters quality bureau reported successful November.

At the time, Reuters reported that Evergrande was besides considering selling Guangzhou FC. But Evergrande's latest connection did not notation the club.

In April 2020, the institution paid $1bn to usage the onshore and operation connected the task got nether mode the aforesaid year.

The $1.8bn (£1.5bn) stadium, which was expected to person astatine slightest 80,000 seats, was scheduled to beryllium completed by the extremity of this year.

In 2010, Evergrande took power Guangzhou FC and changed its sanction to Guangzhou Evergrande Taobao FC.

With an infusion of caller money, the squad was strengthened and it instantly won promotion to the apical tier of Chinese football. From 2011 it won the Chinese Super League rubric 8 times, including 7 seasons successful a row.

However, this play the nine is presently adjacent to the bottommost of the league.

At the commencement of past year, the nine said it would revert to its archetypal sanction - Guangzhou FC.

Guangzhou is the superior and biggest metropolis of Guangdong state successful confederate China.

Image source, Getty Images

Image caption,

The unfinished Guangzhou Evergrande Football Stadium photographed successful March this year

On Sunday, Evergrande said that 1 of its subsidiaries had been ordered to wage retired $1.1bn for failing to honour its indebtedness obligations.

Evergrande Group (Nanchang) Co. Ltd indispensable marque the outgo to a guarantor of its liabilities, the steadfast said.

It came conscionable 2 days aft it made a long-awaited announcement astir however it aims to restructure its overseas debts.

The institution said it volition connection its offshore creditors plus packages that whitethorn see shares successful it overseas units - including an electrical vehicles concern and spot services supplier - arsenic a sweetener.

However, the connection was seen by immoderate commentators arsenic not providing capable details connected however the steadfast aimed to restructure its immense liabilities.

Last month, the steadfast said 2 of its apical executives had resigned, aft an interior probe recovered that they misused astir $2bn successful loans.

Evergrande said it recovered that main enforcement Xia Haijun and main fiscal serviceman Pan Darong were progressive successful diverting the loans secured by its spot services portion to the wider group.

Media caption,

What China's Evergrande situation means for the world

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