Evergrande rules out hiring of a deputy

PUBLISHED : Monday, 24 August, 2009, 12:00am
UPDATED : Monday, 24 August, 2009, 12:00am

Evergrande Real Estate Group says it has no immediate plans to find a replacement for the deputy chief executive who decided not to join the company a month after it was announced he had been hired.

Chief executive James Xia said the developer had a team of 10 in Hong Kong comprising former investment bankers and lawyers strong enough to deal with investor relations.

'The position of the deputy was intended to share my workload in Hong Kong and bolster our team. Investors have become a bit nervous after [the cancellation] of our Hong Kong listing last year and more communication is needed,' Mr Xia said.

The developer scrapped a proposed US$2.1 billion initial public offering in March last year after a collapse in the mainland property market and investors became cautious about the company's high gearing.

Evergrande, which is on its second Hong Kong listing attempt to raise as much as US$1 billion, hired Tam Lai-ling, the finance chief of mainland developer Hopson Development Holdings, as deputy chief executive last month.

However, Mr Tam later turned down the offer because he was unhappy with his pay package, according to sources close to Evergrande.

'We have no consideration [of getting a replacement],' said Mr Xia, adding that the firm had established friendly relations with the banks after a year of communications.

Meanwhile, agents said as of 8pm last night Evergrande had generated about 895.2 million yuan (HK1.02 billion) from two projects. It said it had taken 561.6 million yuan from the sale of 703 apartments and villas at Evergrande Splendor, the firm's phase one development in a suburb of Chongqing, and 333.6 million yuan from selling 245 units at Evergrande Palace in Baotou, Inner Mongolia.

Due to be completed next year, the Chongqing development costs are 2,890 yuan per square metre with apartments ranging from 78 square metres to 121 square metres, and villas, measuring from 138 square metres to 487 square metres.

Mr Xia said seeking a listing was the firm's long-term goal but did not give a timetable.

'This year our contract sales value will set a historical high,' he said.

The firm is looking at contract sales of 30 billion yuan after generating 12.7 billion yuan in the first half.

Sources close to the company said the company's low price strategy would help to speed up its sales.

The developer has a land bank of 50 million square metres in 24 cities.

Mr Xia said its 4.2 billion yuan site in Guangzhou, which was won in an auction in 2007, remained undeveloped because of various issues.

'It is better to wait for the announcement from the Guangzhou government. The government recently announced some sites face the risk of [being returned]. We are not on the list,' he said.