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Economy4 hours ago (Feb 09, 2022 09:50PM ET)
© Reuters. FILE PHOTO: A partially removed company logo of China Evergrande Group is seen on the facade of its headquarters in Shenzhen, Guangdong province, China January src0, 2022. REUTERS/David Kirton
HONG KONG (Reuters) -Shares of China Evergrande Group jumped on Thursday after the chairman of the world’s most indebted property developer said it would resume construction, and ruled out fire sales.
Evergrande, with more than $300 billion in liabilities, including nearly $20 billion international bonds deemed to be in default, has been struggling to repay creditors, suppliers, and deliver homes.
Shares gained as much as 7.2% to HK$src.79, their highest since Jan. 25. That compared with a loss of 0.3% in the benchmark and a rise of 2.5% in Hang Seng Mainland Properties Index.
China Evergrande needs to clear its debt by fully restoring construction and sales activities and not by selling assets on the cheap, its chairman, Hui Ka Yan, told an internal meeting, vowing to complete half of pre-sold homes this year.
Hui said the firm aimed to fully resume construction work across China this month, compared with 93.2% at the end of last year, with a goal of delivering 600,000 apartments in 2022.
Evergrande started having trouble repaying its suppliers and creditors in June as a bloated real estate sector suffered from deleveraging, triggering massive selloffs in its shares and bonds.
During the early days of the firm’s debt crisis, its CEO, Xia Haijun, cashed out his bond holdings for a total of $src28 million between July 27 to August src7 at prices of 35.88 cents to 52.38 cents, stock exchange filings on Wednesday showed.
The prices compared to Evergrande’s bonds trading at around src5 cents on Thursday.
The bonds involved were 8.75% notes due 2025, srcsrc.5% notes due 2023 and srcsrc.5% senior notes due 2022.
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