Evergrande pushed forward the sale of Land in Hong Kong after appointing a receiver

Reuter

The logo of the China Evergrande Center Building appeared in Hong Kong, China on December 7, 2021

China Evergrande Group will continue its efforts to sell an undeveloped piece of land in Hong Kong, a person familiar with the matter said.

The person said the appointment of a receiver would not have any impact on the group's restructuring process.

Another person said last month that U.S. asset manager OakTree Capital Management, a lender to Evergrande Group's development of large tracts of land in rural Yuen Long, has sought to take control of the asset by appointing a receiver.

Oak's move came after Evergrande, the world's most indebted real estate developer, defaulted on a secured loan, the source declined to be named after not being authorized to speak to the media, the first person said.

The person said that the asset is likely to be sold in the "relatively recent" period, and after the sale is completed, oak trees will be returned and the remaining proceeds will be recovered by Evergrande.

The Financial Times reported on January 28 that at the end of last year, the developer defaulted on a guaranteed loan provided by Evergrande, and Oak also controlled a residential development project in Shanghai Evergrande.

The person said that Evergrande has not taken similar actions by other international creditors.

Evergrande said in an exchange filing on Jan. 30 that it was seeking legal advice on the appointment of a receiver for the Yuen Long plot and that the company was in discussions with lenders.

The developer said the land in Yuen Long had collected a $520 million advance from the Group as collateral in January 2021. However, Evergrande's documents did not mention the names of the creditors.

Evergrande did not immediately respond to a request for comment from Reuters on Friday.

Evergrande, once China's best-selling developer, said last month that it aims to work out an initial restructuring plan within six months as it has struggled to appease creditors hit by defaults since its finances began to collapse last year.

Developers have been working hard to repay creditors, suppliers and investors in wealth management products. Its nearly $20 billion in international bonds are now considered defaults.

"It's a very complex situation, so the company needs time to evaluate alternatives and develop a restructuring plan; it has set a six-month deadline within which (it needs) to achieve those goals," the person said.