China Evergrande Group to settle $511 mn trust loan with state help
Real Estate

China Evergrande Group to settle $511 mn trust loan with state help

China Evergrande Group aims to return land set aside for collateral for a $510.73 million trust loan from CITIC Trust Co to the Guangzhou government.

The agreement centres around a $510.73 million trust loan that CITIC Trust issued to Evergrande using funds raised from investors. Under the loan resolution, CITIC will return the land utilised as collateral to Evergrande, the world's most indebted property developer, who will then give it to the Guangzhou city government to put up for sale.

State-owned Guangzhou City Construction Investment group will work as a guarantor of the loan, and CITIC will repay the principal amount to its investors within two years utilising funds from the Guangzhou city government.

The plan is still pending clearance from the investors of the trust loan. If successfully executed, this model of local government and creditors working together to settle Evergrande's debt repayment issue could be replicated for other trust loans, and more state-owned city investment companies may become engaged in the company's debt restructuring process. Trust firms, which pool money from wealthy investors, are a significant source of funding for Evergrande and other property developers in China. A wave of defaults in the property sector has discouraged investors and while state intervention has quelled market concern over an uncontrolled collapse of China Evergrande, investors are still in the dark over whether they will recoup their money.

Evergrande, with more than $300 billion in liabilities, defaulted on some overseas bond payments in December and has struggled to repay suppliers and creditors and achieve projects and houses.

Image Source

Also read: China braces for Evergrande Group downfall: Wall Street Journal report

China Evergrande Group aims to return land set aside for collateral for a $510.73 million trust loan from CITIC Trust Co to the Guangzhou government. The agreement centres around a $510.73 million trust loan that CITIC Trust issued to Evergrande using funds raised from investors. Under the loan resolution, CITIC will return the land utilised as collateral to Evergrande, the world's most indebted property developer, who will then give it to the Guangzhou city government to put up for sale. State-owned Guangzhou City Construction Investment group will work as a guarantor of the loan, and CITIC will repay the principal amount to its investors within two years utilising funds from the Guangzhou city government. The plan is still pending clearance from the investors of the trust loan. If successfully executed, this model of local government and creditors working together to settle Evergrande's debt repayment issue could be replicated for other trust loans, and more state-owned city investment companies may become engaged in the company's debt restructuring process. Trust firms, which pool money from wealthy investors, are a significant source of funding for Evergrande and other property developers in China. A wave of defaults in the property sector has discouraged investors and while state intervention has quelled market concern over an uncontrolled collapse of China Evergrande, investors are still in the dark over whether they will recoup their money. Evergrande, with more than $300 billion in liabilities, defaulted on some overseas bond payments in December and has struggled to repay suppliers and creditors and achieve projects and houses. Image Source Also read: China braces for Evergrande Group downfall: Wall Street Journal report

Next Story
Real Estate

Mahindra Lifespaces Bags Rs 12.5 billion Redevelopment in Mulund

Mahindra Lifespace Developers (MLDL), the real estate and infrastructure development arm of the Mahindra Group, has been appointed as the preferred developer for the redevelopment of a premium housing society in Mulund (West), Mumbai. The project will be developed across a 3.08-acre land parcel, with an estimated development value of approximately Rs 12.5 billion. Strategically located, the site enjoys proximity to major connectivity points—just 1.4 km from the upcoming Mumbai Metro Line 5 and 0.8 km from the Goregaon-Mulund Link Road. It also offers seamless access to the Eastern Expre..

Next Story
Infrastructure Urban

Snowman Adds Warehouses in Kolkata and Krishnapatnam

Snowman Logistics, India’s leading integrated temperature-controlled logistics company, has announced the commencement of operations at its two new state-of-the-art, owned cold storage facilities in Kolkata and Krishnapatnam. With these additions, the company’s total pallet capacity has reached 1,50,754, spanning 43 warehouses in 20 cities across the country. The newly operational Kolkata facility offers a storage capacity of 5,630 pallets, while the Krishnapatnam facility holds 3,927 pallets. These warehouses are equipped with advanced automation and infrastructure designed to enhanc..

Next Story
Resources

Noesis Enables IHCL Hotel Deal in Udupi–Manipal Corridor

NOESIS Capital Advisors, India’s leading hotel investment advisory firm, has successfully facilitated a landmark hospitality transaction in the Udupi–Manipal region of Karnataka. The deal involves the acquisition of a nearly completed, 130-key upscale hotel that will operate under one of the premium brands of IHCL, reinforcing NOESIS’ position as a preferred partner for strategic hospitality transactions across India. Strategically located on the Udupi–Manipal Highway, the 1.03-acre property will cater to business travellers, pilgrims and families visiting Manipal University. With..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?