Evergrande has resumed work on sime construction projects. Earlier efforts to sell some assets fell through so the company is returning to construction of high-rise buildings.
China Evergrande Group said they had resumed work on more than 10 projects in six cities including Shenzhen – a statement that comes after it appeared to avert default with a last-minute bond coupon payment last week.
Evergrande, deep in crisis with more than $300 billion in liabilities, has not disclosed how many of its 1,300 real estate projects across China it has had to halt work on. The group had 778 projects spanning 233 cities in China as at end-June, according to its latest interim report.
The Chinese real estate market is approximately $5 trillion. Evergrande’s problems have reverberated through the whole sector and even got the attention of the governments world wide.
Money earned from construction should help recover the solvency but the company invested in areas that weighing it down from being as flexible as it could be.
The problem in China is that construction is very heavily leveraged which makes it very complicated. Cash flow is vital.