Evergrande shares rise after reports of restructure
Shares in debt-laden Chinese property giant Evergrande rallied yesterday after a state firm official was appointed to its board, paving the way for a government rescue plan.
Evergrande, which has been teetering on the brink for months owing to its struggles in servicing a debt pile of more than $300 billion, ended up nearly four percent higher yesterday.
The rally came after a stock exchange filing on Jan. 23 showed the company has appointed Liang Senlin of China Cinda Asset Management - one of the country’s four biggest state asset managers - to its board.
The provincial government of Guangdong, where the firm is headquartered, is currently overseeing Evergrande’s debt restructuring process and appointing an official from a major state asset manager appears to have pleased investors.
State-owned firms are expected to take over the ailing property giant’s assets and the company set up a risk management committee in December 2021, with senior officials from state entities to facilitate the process.
The company has repeatedly said it will finish its projects and deliver them to buyers in a desperate bid to salvage its debts, despite having missed a payment of more than $1.2 billion in December.
China’s property firms have struggled in the wake of Beijing’s drive to curb excessive debt in the real estate sector as well as address rampant consumer speculation.