China Evergrande vows to ‘unwaveringly’ follow Beijing’s orders after being summoned by regulators

Evergrande says it will be ‘at full stretch and by all means possible’ keep operations stable and cut debt in line with Beijing’s wishes

Shares of China Evergrande Group companies take a beating following Friday’s statement

2-MIN READ2-MIN

The China Evergrande Centre in Hong Kong. ‘We will diffuse our debt risk and maintain the stability of the property and financial markets with our greatest determination and utmost effort,’ the company said on Friday. Photo: Bloomberg

Published: 1:35pm, 20 Aug 2021Updated: 11:55am, 15 Sep 2021

China Evergrande, the world’s most indebted developer, has promised to “unwaveringly” follow the central government orders after being summoned by the country’s top financial regulators overnight.

Evergrande, China’s biggest home builder, said on Friday morning that it would be “at full stretch and by all means possible” keep operations stable and cut debt in line with Beijing’s wishes.

“We will ensure quality of construction and make sure that we deliver quality homes in quantity,” the Shenzhen-based developer said. “We will diffuse our debt risk and maintain the stability of the property and financial markets with our greatest determination and utmost effort,” it added.

The company faces a hostile market despite its attempts to steady the ship amid concerns about its finances. Unable to borrow, it has been selling assets to avert a liquidity crunch. Despite slashing its interest bearing liabilities by a third to 570 billion yuan (US$87.9 billion) in June from last year’s peak, global credit-rating firms have downgraded its creditworthiness.

Friday morning’s announcement came after the People’s Bank of China and the China Banking and Insurance Regulatory Commission issued a joint statement late on Thursday saying that they had summoned top executives from Evergrande and had urged them to “actively diffuse debt risks”.

The shares of China Evergrande Group companies had a mixed day following Friday’s statement. China Evergrande closed 1.6 per cent lower at HK$4.92, its lowest level since the beginning of 2017. China Evergrande New Energy Vehicle, climbed 5 per cent to HK$10.50, while Evergrande Property Services Group recouped most of its losses to close 0.17 per cent lower at HK$6.02.