Evergrande Ordered to Demolish 39 Buildings on World’s Largest Artificial Island

Please fol­low and like us:
Pin Share

  • An ille­gal­ly obtained build­ing per­mit was revoked and the com­pa­ny was ordered to demol­ish the 39 build­ings with­in 10 days
  • Ever­grande missed bond pay­ments equiv­a­lent to $255 mil­lion that came due on Dec. 28, but it has a 30 day grace period

In the lat­est set­back for debt-rid­den Chi­nese real estate giant Ever­grande, an admin­is­tra­tive rul­ing in ​​Danzhou City, Hainan Province, will force the com­pa­ny to demol­ish 39 build­ings under con­struc­tion on Hai­hua Island — the world’s largest arti­fi­cial island — accord­ing to local Chi­nese media.

Last month, Fitch Rat­ings down­grad­ed the Chi­nese real estate devel­op­er to ‘Restrict­ed Default’ after the grace peri­od on bond pay­ments, pre­vi­ous­ly due, expired. Ever­grande missed a fur­ther $255 mil­lion in coupon pay­ments last week, Reuters report­ed, start­ing the clock on a new 30-day win­dow before trig­ger­ing a fur­ther default.

Shares trad­ed sharply low­er on the news and closed out Decem­ber in Hong Kong trad­ing at $1.59, for a loss of rough­ly ‑89% on the year.

On Mon­day, the com­pa­ny request­ed shares to be halt­ed pend­ing the release of inside infor­ma­tion, while an index of Chi­nese devel­op­er shares fell 1.7%, Bloomberg notes, although the com­pa­ny did not link the halt specif­i­cal­ly to the demo­li­tion news.

Chi­nese Media reports that the Danzhou Com­pre­hen­sive Admin­is­tra­tive Law Enforce­ment Bureau issued the deci­sion on Dec. 30, which was con­firmed on Jan. 1, and requires Danzhou Xin­heng Tourism Devel­op­ment Co., Ltd., an Ever­grande sub­sidiary, to demol­ish the 39 build­ings locat­ed in the bay area of ​​Danzhou City.

The build­ings occu­py about 435,000 square meters on Hai­hua Island No. 2, but their plan­ning per­mit was ille­gal­ly obtained, accord­ing to the new order.

The devel­op­ment was a pet project of chair­man Xu Jiayin, who told employ­ees in a New Year’s speech that he was proud of their efforts in recent months despite the unprece­dent­ed finan­cial challenges.

Unlike pre­vi­ous bouts of grim Ever­grande news, mar­kets in Europe, as well as S&P futures, show no adverse reac­tion in Mon­day trad­ing as of 7:45 AM ET.

Major equi­ties mar­kets along­side the largest dig­i­tal asset names are flat or mod­est­ly high­er to kick off Jan­u­ary, a sea­son­al­ly strong month for stocks.


Get the day’s top cryp­to news and insights deliv­ered to your inbox every evening. Sub­scribe to Block­works’ free newslet­ter now.


  • Macauley Peter­son

    Macauley has been an edi­tor and con­tent cre­ator in the pro­fes­sion­al chess world for 14 years. He is a grad­u­ate of Bucerius Law School in Ham­burg, Ger­many (Mas­ter in Law and Busi­ness 2020), where he researched sta­ble­coins, decen­tral­ized finance and cen­tral bank dig­i­tal cur­ren­cies. He also holds an MA in Film Stud­ies and his film cred­its include Asso­ciate Pro­duc­er of the 2016 fea­ture doc­u­men­tary, “Mag­nus” about World Chess Cham­pi­on Mag­nus Carlsen.

Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published. Required fields are marked *