Developer China Evergrande says debt level has dropped to 570 billion yuan

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A company logo of China Evergrande is displayed at the entrance of the China Evergrande Center in Hong Kong, China on March 26, 2018. REUTERS / Bobby Yip / Files

HONG KONG, June 29 (Reuters) – China Evergrande Group (3333.HK) said on Tuesday that its interest-bearing debt had fallen to about 570 billion yuan ($ 88.23 billion), from 716.5 billion yuan end of 2020.

The company announced earlier this month that the debt level would drop below 600 billion yuan by the end of June, hitting one of three debt ratio ceilings set by regulators and approaching its year-end target of 560 billion yuan.

China’s most indebted real estate developer pledged last year to reduce its debt by 150 billion yuan a year for three years, with a goal of reaching the three ceilings by the end of 2022.

Evergrande is on the hunt for liquidity as Beijing tackles what it sees as excessive borrowing in the property development sector with new debt-to-debt ratio ceilings planned dubbed the “three red lines.”

Last week, Evergrande said it set up its own $ 1.75 billion fund to repay its $ 1.5 billion offshore bonds due Monday, as well as to pay interest on all other dollar bonds. Read more

Investors became increasingly concerned about the developer’s financing capacity when he confirmed earlier this month that some of his project companies’ commercial papers had not been repaid on time, but that he organized the payments. Read more

In a document released Tuesday, supplier Skshu Paint Co (603737.SS) said customer Evergrande failed to repay 49 million yuan in commercial invoices due in the first quarter on time as of May 31 because ” major real estate developers were facing liquidity difficulties “.

Responding to Reuters about the late payment, Evergrande said all commercial invoices related to Skshu Paint have now been fully reimbursed.

($ 1 = 6.4604 Chinese yuan)

Reporting by Clare Jim; Additional reporting by Andrew Galbraith in Shanghai; Editing by Jacqueline Wong

Our Standards: Thomson Reuters Trust Principles.


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