China Evergrande to get $818 mn for scrapping stadium deal

Evergrande is in restructuring talks as it struggles under a debt mountain of more than $300 billion

Evergrande is in restructuring talks as it struggles under a debt mountain of more than $300 billion

Embattled Chinese property giant Evergrande has cancelled a contract to build a football stadium in a southern city in return for 5.52 billion yuan ($818 million), it said in a filing.

The real estate behemoth has been involved in restructuring negotiations after racking up $300 billion in liabilities in the wake of  Beijing's crackdown on excessive debt and rampant speculation in the property sector.

In a filing to the Hong Kong stock exchange late Thursday, Evergrande said "the group's liquidity issue has adversely affected the development of and construction on the land" in Guangzhou.

The contract allowed for commercial and sports uses of the land for 40 years, as well as other business uses for 50 years, the filing said.

The latest refund will enter a project escrow account designated by the government and will be used to settle debts relating to the deal, Evergrande said.

Evergrande, one of China's biggest developers, has scrambled to offload assets in recent months, with chairman Hui Ka Yan paying off some of its debts using his personal wealth.

Its troubles are emblematic of the problems rippling across China's massive property sector, with smaller companies also defaulting on loans and others struggling to raise cash.

bys/oho/dan

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