Evergrande is losing some property projects as China’s state-owned companies pick away at the assets of world’s most indebted developer

Evergrande Fairyland, a theme park in Guangzhou’s Nansha district, was taken over on January 26 by the China Minmetals Group’s Minmetals International Trust

In Dongguan, a mixed-development real estate project came under the control of state-owned China Everbright Group on Monday

Reading Time:2 minutes

Unfinished apartment buildings at the construction site of China Evergrande Group’s Health Valley development on the outskirts of the Jiangsu provincial capital of Nanjing on Friday, Oct. 22, 2021. Photo: Bloomberg

Published: 1:53pm, 26 Feb 2022Updated: 1:57pm, 26 Feb 2022

China Evergrande Group lost control of some of its property projects around the country, as several state-owned developers picked away at its assets while the heavily indebted builder teeters on the brink with more thanUS$300 billion of total liabilities.

Evergrande Fairyland, a theme park subsidiary in the Nansha district of the Guangdong provincial capital of Guangzhou was completely taken over on January 26 by the China Minmetals Group’s Minmetals International Trust, according to the business data search platform Tianyancha.

In the Guangdong manufacturing hub of Dongguan, a mixed-development real estate project – built on land that Evergrande bought in 2020 for nearly 3 billion yuan (US$475 million) – came under the control of state-owned China Everbright Group on Monday, according to the national enterprise credit information publicity system.

The spate of takeovers underscore how Evergrande, with the dubious honour as the world’s most indebted developer, is being taken apart by creditors as it grapples to raise capital to pay its borrowings. The company’s asset sales – including its 26-storey Hong Kong harbourfront headquarters and dozens of projects in mainland China – had been mostly spurned because of their intricate financing ties with various units.

An undated concept image of the China Evergrande Group’s Evergrande Fairyland theme park in the Nansha district of the Guangdong provincial capital of Guangzhou. Photo: wantubizhi.com

Beijing is encouraging state-owned enterprises (SOEs), including developers and distressed debt managers, to acquire assets and from liquidity crunched home builders such as Evergrande and Kaisa Holdings to ease their pressure.

Beijing’s loan limit for real estate companies, widely known as the “three red lines”, which has pushed many developers to the brink, has been partially relaxed, according to a report by a state-backed media outlet in January.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x