- Wednesday, October 16, 2024
China Evergrande Group, the world's most indebted developer, made significant progress in 2022 by reducing its losses and pivoting towards property sales while cutting costs. According to its recently published annual report for 2022, the Guangzhou-based conglomerate reported a net loss of 105.91 billion yuan ($14.51 billion), a significant improvement compared to the loss of CNY476.04 billion in the previous year.
Despite the reduction in losses, Evergrande experienced a decline in revenue from CNY250.01 billion to CNY230.07 billion during this period. The company faced multiple challenges due to its cash-flow problems, leading to debt defaults and payment delays to contractors and suppliers. Furthermore, China's regulatory crackdown on leverage in the property sector had a detrimental effect on many real estate developers, causing a sharp decrease in home sales and limited access to the debt market.
As of the end of 2022, Evergrande's total liabilities stood at CNY2.44 trillion. To protect the interests of its creditors in the long term, the company has committed to expediting the restructuring of offshore debt and implementing other necessary measures.
To address its debt situation, Evergrande successfully negotiated a deal worth $19 billion in bonds with international creditors. Under this agreement, holders of the developer's foreign debt have the option to swap their holdings into new long-term debt or accept principal losses and receive a combination of shorter-term bonds and equity-linked notes backed by shares of Evergrande or its listed subsidiaries, including Evergrande Auto.
Looking ahead, Evergrande is committed to ensuring a stable and organized progression in key business areas such as property delivery, the continued operation of new-energy vehicles, and property services. The company is also exploring options to sell or effectively utilize some of its core assets to mitigate risks.
More Posts
All Rights Reserved © 2024
Post a comment