Reuters: China urges state-backed companies to buy assets of real estate giant Evergrande

Published:

28 sep 2021 13:59 GMT

Although the government does not plan to intervene directly, in this way it seeks to avoid a financial crisis in case the company collapses.

Chinese authorities aim to prevent Evergrande’s collapse from causing a financial crisis largest in the country, prompting state-owned companies and government-backed real estate developers to buy assets from the real estate giant, reports Reuters citing officials with knowledge of the matter, whose names were not released.

According to sources, one of these agreements is close to being finalized in the city of Canton, where a construction firm could acquire the stadium that is being built for the Guangzhou FC, local soccer club owned by Evergrande, whose cost is calculated in about 12 billion yuan (1,900 million dollars). The deal would also include the residential projects around the sports complex.

On the other hand, according to reports, potential buyers of Evergrande assets in that city would receive “political and commercial considerations” in return.

Unpaid debts

Real estate giant Evergrande is estimated to have a passive that exceeds 300,000 million dollars, affecting more than 250 banks and non-bank entities. Last week the company did not pay 83.5 million in interest and this Wednesday, September 29, the deadline to pay 47.5 million dollars is due.

Meanwhile, Beijing tries to stop any adverse effect on the financial system due to the crisis that Evergrande is going through, which the Chinese authorities are already investigating. In particular, the Shenzhen financial regulator opened a research on the unit that manages the heritage of the company.

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