China Evergrande shares firm after chairman vows full construction, no fire sales

© Reuters. FILE PHOTO: A partially removed company logo of China Evergrande Group is seen on the facade of its headquarters in Shenzhen, Guangdong province, China January 10, 2022. REUTERS/David Kirton

HONG KONG (Reuters) -Shares of China Evergrande Group jumped on Thursday after the chairman of the world’s most indebted property developer said it would resume construction, and ruled out fire sales.

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.

Shares gained as much as 7.2% to HK$1.79, their highest since Jan. 25. That compared with a loss of 0.3% in the benchmark and a rise of 2.5% in Hang Seng Mainland Properties Index.

China Evergrande 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 firm 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 firm’s debt crisis, its CEO, Xia Haijun, cashed out his bond holdings for a total of $128 million between July 27 to 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.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.