Shares of China Evergrande Group rose on Thursday on reports that the chairman of the world’s most indebted property developer said it would resume construction and ruled out fire sales.
In mid-morning trading in Hong Kong, its stock rose as much as 7.2% to HK$1.79 before paring gains to HK$1.74. The share price has risen more than 8% this year, but has lost nearly 90% of its value over the past 12 months.
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.
The developer 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 company 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 debt crisis, Xia Haijun, chief executive, cashed out his bond holdings for $128 million between July 27 and August 17 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 15 cents on Thursday. The bonds involved were 8.75% notes due 2025, 11.5% notes due 2023 and 11.5% senior notes due 2022.
- Reuters, with additional editing by George Russell
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