The Evergrande Center building, in Shanghai, China, on Sept. 22.HECTOR RETAMAL/AFP/Getty Images
The city of Chengdu has taken back two plots of land from China Evergrande Group, the latest move by authorities to seize assets from the cash-strapped property developer.
The land-planning authority in the southwestern city said it was taking control of the plots, totalling more than 300,000 square meters, as Evergrande had not developed them after holding them for more than a decade.
The notices on the two plots, posted by the authority on Dec. 17, followed the same move by the Haikou city authority early last week, taking back a plot without compensation in the country’s island province of Hainan.
The Chinese government is calling the shots at Evergrande after the real estate giant missed payments on two overseas bonds, triggering a restructuring to deal with its more than US$300-billion in liabilities.
The authorities are scrutinizing the assets of Evergrande and its wealthy chairman Hui Ka Yan but expect no fire sale for now, two sources with direct knowledge of the matter said last week.
A government body has taken over Evergrande’s soccer stadium in Guangzhou – set to be the world’s largest soccer venue by capacity – with a view to selling it, another person said last month, as the developer has halted construction owing to a lack of capital.
Its EV unit China Evergrande New Energy Vehicle Group also said late last month it had returned undeveloped lands for seven projects worth a total of US$203.87-million to the government.
Shares of Evergrande fell 9.9 per cent on Monday in Hong Kong to a fresh low.
S&P downgraded Evergrande on Friday to “selective default” after the firm missed a debt payment deadline earlier this month, putting the developer at risk of becoming the country’s biggest defaulter. Rating agency Fitch has already downgraded the developer to “restricted default.”
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