Evergrande gets $818m as football stadium land deal is canceled

Natxo Insa of Johor Darul Ta'zim controls the ball under pressure from Chen Zhengfeng of Guangzhou FC during the AFC Champions League Group I match on April 15, 2022.

Natxo Insa of Johor Darul Ta’zim controls the ball under pressure from Chen Zhengfeng of Guangzhou FC during the AFC Champions League Group I match on April 15, 2022.

Deeply indebted Chinese real estate giant Evergrande said it would receive $818 million after canceling a deal to buy land rights for a new soccer stadium.

Construction of the stadium began more than two years ago, but has been experiencing problems for months.

The stadium was for Guangzhou FC, a top team of which Evergrande bought a majority stake in 2010.

Money from the deal will be used to settle debts related to the project, the company added.

The announcement comes as Evergrande tries to raise funds to pay off its debt.

Once China’s top-selling property developer, the company has been struggling since last year under the weight of more than $300 billion in debt, about $20 billion of which is held by foreign investors.

As part of the deal, land, buildings and other items associated with the stadium will be transferred to the Guangzhou Municipal Planning and Natural Resources Bureau, the company said in a statement to the Hong Kong Stock Exchange.

In September 2021, he said construction work on the Guangzhou Evergrande Football Stadium would continue despite its debt crisis. But a government body took control of the stadium last year and planned to sell it, Reuters news agency reported in November.

At the time, Reuters reported that Evergrande was also considering selling Guangzhou FC. But Evergrande’s latest statement didn’t mention the club.

In April 2020, the company paid $1 billion to use the land, and construction on the project began the same year.

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The $1.8bn (£1.5bn) stadium, which was to have at least 80,000 seats, was due to be completed by the end of this year.

In 2010, Evergrande took over Guangzhou FC and changed its name to Guangzhou Evergrande Taobao FC.

With an injection of fresh money, the team was strengthened and they were immediately promoted to the top level of Chinese football. Starting in 2011, he won the Chinese Super League title eight times, including seven consecutive seasons.

However, this season the club is currently near the bottom of the league.

Early last year, the club announced that it would revert to its original name – Guangzhou FC.

Guangzhou is the capital and largest city of Guangdong Province in southern China.

An aerial photo taken on March 20, 2022 of the Guangzhou Evergrande Football Stadium under construction in Guangdong province, China.

The unfinished Guangzhou Evergrande football stadium pictured in March this year

On Sunday, Evergrande said one of its subsidiaries was ordered to pay $1.1 billion for failing to honor its debts.

Evergrande Group (Nanchang) Co. Ltd must make payment to a guarantor for its debts, the company said.

It came just two days after making a long-awaited announcement on how it plans to restructure its external debts.

The company said it would offer its offshore creditors asset packages that could include shares in its overseas units – including an electric vehicle company and a property services provider – as a sweetener.

However, the proposal was seen by some commentators as not providing enough detail on how the company aimed to restructure its huge liabilities.

Last month, the company said two of its top executives had resigned, after an internal investigation found they misused about $2 billion in loans.

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Evergrande said it discovered that chief executive Xia Haijun and chief financial officer Pan Darong were involved in the diversion of loans secured by its real estate services unit to the wider group.

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