HONG KONG: China Evergrande Group said its creditors have sold a plot of undeveloped land in Hong Kong’s Yuen Long intended for a residential development project for US$637 million, according to an exchange filing.
Evergrande expects to record a loss of approximately US$770 million for the transaction. Proceeds will be used to repay the financial obligations in relation to the project, today’s filing said.
The troubled developer announced in January that the plot of land was used as security for a financing transaction worth US$520 million. The project was seized by Oaktree Capital after Evergrande defaulted on a loan against which Oaktree had security, according to a Financial Times report.
Evergrande is at the centre of a credit crisis that has rippled through China’s real estate sector and slowed the world’s second-largest economy. The company failed to deliver a preliminary restructuring plan for its offshore debt that was expected by the end of July, and has since said it would try to provide a specific proposal before the end of the year.