Chinese property giant Evergrande Group has decided to give up a piece of land used to build a football stadium in return for a refund of $816.3 million to repay part of its debts.
According to Liberty Times, Evergrande announced on August 4 that it would return the land use rights of Guangzhou Evergrande Football Stadium to the Guangzhou city authority.
The transfer is due to the group’s liquidity problems and is aimed to help further ease its debt burden.
In its announcement, Evergrande said that the refund will not be directly allocated to the company but will be transferred to a special supervision account. This account is set up by the municipal authority to solve the debt problems caused by Evergrande’s use of this land.
The developer expects that this transfer will result in a loss of over $186 million from the project.
Radio Free Asia reported that Guangzhou Evergrande Football Stadium was one of Evergrande’s key construction projects.
Evergrande won the right to use the land for just over $1 billion in 2020 and began to build the stadium.
The stadium was initially scheduled to be completed and used before the end of 2022. But with Evergrande’s debt crisis outbreak, it has become a bubble.
After Evergrande withdraws from the project, the Guangzhou municipal authority will continue construction of the 100,000-seat stadium to completion.
China Evergrande Group defaulted on its dollar bonds in December 2021.
The Wall Street Journal citing the most recent figures available reported that Evergrande had more than $300 billion in debt and other liabilities as of June 2021.
In January, the group said it would release a preliminary restructuring proposal by the end of July, a missed deadline.
The move causes ongoing uncertainty over the destiny of China’s once real estate champion.
Evergrande now hopes to reach an agreement in principle with its main creditors before the 20th National Congress of the Chinese Communist Party later this year.