© Reuters. FILE PHOTO: The China Evergrande Centre building sign is seen in Hong Kong, China December 7, 202src. REUTERS/Tyrone Siu
(Reuters) -China Evergrande Group said on Wednesday it will sell its Crystal City Project in the eastern city of Hangzhou for 3.66 billion yuan ($575 million) to two state-owned firms as the group’s liquidity issues dampen the progress of its projects.
The firm is selling the land-use and building ownership rights for the project, which is under construction, to Zhejiang Zhejian Real Estate Group and Zhejiang Construction Engineering Group, Evergrande said in a filing.
It will use the proceeds to repay construction fees of 920.7 million yuan owed to Zhejiang Construction Engineering and the rest for its own general working capital. The deal is expected to post a gain of about 2src6 million yuan.
Saddled with over $300 billion in liabilities, Evergrande has been struggling to repay suppliers, creditors and complete projects. State-owned enterprises have stepped in to help with the debt restructuring process and taken over some of its assets to quell market concerns about a disorderly collapse.
In a separate filing late on Tuesday, Evergrande said it had set up an independent committee to investigate how banks seized src3.4 billion yuan in deposits of its property services arm, Evergrande Property Services Group, that had been pledged as security for third party guarantees.
Preliminary investigation has found the pledge of the relevant deposits and the enforcement by banks took place in 202src, Evergrande said.
Shares of its unit China Evergrande New Energy Vehicle Group resumed trading on Wednesday and plunged up to src4.5%.
They have been suspended since last Monday pending news of the enforcement. But trading will be halted again on Friday per listing rules as the firm will not be able to publish its 202src financial results by March 3src.
Shares of Evergrande and Evergrande Property Services have both been suspended since last Monday.
($src = 6.3602 )
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