Evergrande is trying to reassure investors about the impact of an official order to demolish a few dozen buildings in China. Chinese media reported over the weekend that authorities in Hainan province, a tropical resort island off the coast of southern China, had ordered Evergrande to demolish 39 buildings, saying that the building permits had been illegally obtained.
The company acknowledged the order in a post on WeChat on Monday night but added that it did not affect other buildings in the same property project, which involved some 61,000 property owners. The 39 buildings are part of Evergrande gigantic Ocean Flower Island project in Hainan, in which the company has invested nearly $13 billion over the last six years.
Evergrande, China’s second-largest property developer by sales in 2020, is reeling under more than $300 billion of total liabilities. It has been scrambling for months to raise cash to repay lenders, and the company chairman Xu Jiayin has been reportedly selling off personal assets to prop up its finances. But that doesn’t seem enough to avoid default.