Evergrande battles to save Yuen Long plot

Staff reporter and Bloomberg

China Evergrande (3333) said it was notified that receivers have been appointed over a plot of undeveloped land in Yuen Long which the developer used as security for US$520 million (HK$4.06 billion) financing transaction in January last year.

The indebted developer said it is seeking legal advice to protect its legal rights and is in active discussions with the lender on resolving the matter to maximize its return.

Evergrande said the appointment of receivers and the potential sale of the relevant secured assets will not have a material impact on its operations or financial position, nor affect its ongoing debt restructuring exercise.

The Financial Times reported earlier that US investment firm Oaktree Capital has taken over a 2.2 million-square-foot plot in Yuen Long which was used by Evergrande as collateral.

Meanwhile, China's property loan growth stabilized in the fourth quarter of 2021, even before authorities called on banks to increase lending to the struggling sector to ease a liquidity crisis.

The country's outstanding loans in the property sector increased to 52.17 trillion yuan (HK$63.9 trillion) at the end of 2021, according to the People's Bank of China. The year-over-year growth was 7.9 percent, faster than the 7.6 percent pace seen at the end of September, which was the slowest rate since the PBOC started analyzing the data in 2010.

Outstanding individual mortgages were 38.32 trillion yuan at the end of 2021, up 11.3 percent year-on-year, with the pace unchanged from September. Outstanding property development loans, however, declined for the third consecutive quarter to 12.01 trillion yuan.