Channelnewsasia reported that a Chinese court ordered the freezing of assets worth 640.4 million yuan ($101 million) held by a China Evergrande Group subsidiary.
State-owned Shanghai Construction, which sued Evergrande in December for outstanding construction costs in Chengdu, cited a Guangzhou Intermediate People’s Court judgment that the assets to be frozen will include deposits in a bank and real estate.
A municipal court in Guangzhou has frozen 361.5 million yuan ($57 million) in assets of a different Evergrande business in the central province of Jiangsu for outstanding payments.
Since August last year, many suppliers and contractors have launched legal actions against Evergrande amid the company’s shortage of funds.
Chinese-language media Da Ji Yuan reported that, according to a source close to Evergrande, many of China Evergrande’s projects’ escrow accounts are slowly running out, making it impossible to resume construction. It is usual for a project to have a shortage of several hundred million yuan.
China Evergrande still has a vast capital gap. In the first half of the year, Evergrande Pearl River Delta Company planned to “guarantee the delivery of buildings” for a total of 36 projects in the region, and the corresponding fund demand reached 2.98 billion yuan ($468.6 million).
On the other hand, China Evergrande also faces debt pressure from offshore bondholders.
Reuters cited a source familiar with the matter that said on February 4th that China Evergrande has continued selling the Yuen Long rural land in Hong Kong, despite that Oaktree Capital, its creditor, had appointed a receiver. Evergrande had defaulted on a secured $520 million loan from Oaktree Capital, an asset management firm.
It is planning to use the funds from the transaction to pay Oaktree Capital. Evergrande will reclaim the remaining proceeds.
On January 20th, a group of them hired law firm Kirkland & Ellis and investment bank Moelis to discuss legal actions over concerns of their rights. Via the law company, they said Evergrande had “disregarded” them in the plan to resolve its massive debt load and warned that enforcement actions were what they “seriously consider.”