Chinese courts freeze $157 million in Evergrande assets over missed construction payments

A ship passes some of the 39 buildings developed by China Evergrande Group for which authorities have issued a demolition order, on the man-made Ocean Flower island in Danzhou, Hainan province, China January 7, 2022. REUTERS/Aly Song

HONG KONG, Feb 16 (Reuters) – A Chinese court has ordered the freezing of 640.4 million yuan ($101 million) in assets held by a subsidiary of China Evergrande Group (3333.HK), according to a filing by contractor Shanghai Construction Group.

State-owned Shanghai Construction, which in December sued the Evergrande unit in the southwestern city of Chengdu over late construction charges, cited the Guangzhou Intermediate People’s Court ruling that the assets to be frozen will include bank deposits and real estate.

Separately, Shanghai Construction Group said last week that a local court in Guangzhou froze 361.5 million yuan in assets of another Evergrande unit in central Jiangsu province for late payment.

Numerous suppliers and contractors have taken legal action against Evergrande, the world’s most indebted property developer with more than $300 billion in debt, for missed or late payments.

A growing number of building and decorating companies are also writing off assets or issuing profit warnings as debt problems at Evergrande and other property developers weaken their suppliers. Read more

To better oversee and manage Evergrande’s debt restructuring by the authorities, all lawsuits against the developer across the country have been centrally handled by the Guangzhou Intermediate People’s Court since around August.

Evergrande declined to comment on the lawsuit with Shanghai Construction Group.

Company chairman Hui Ka Yan told an internal meeting earlier this month that the company aims to fully restore construction work across China by February, up from 93.2% at the end of the month. from last year, with the aim of delivering 600,000 apartments in 2022. read more

He added that the company should clear its debt by fully restoring construction and sales activities and not by selling assets on the cheap.

($1 = 6.3399 Chinese yuan renminbi)

Reporting by Clare Jim; Edition by Lincoln Feast.

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