China Evergrande to sell commercial land for US$1.05 billion

China Evergrande Group entered into a deal on Monday to sell a piece of commercial land in Shenzhen for 7.54 billion yuan US $1.05 billion as the embattled property developer looks to shave off its massive debt.

Evergrande, which has around US $300 billion in liabilities, has been at the centre of a deepening debt crisis in China that has seen several developers defaulting on their offshore debt obligations over the past year, prompting many to consider debt restructuring.

The company said it will sell the land to Shenzhen Anhe No 1 Property Development, a unit of Shenzhen Anju Construction Investment and Operation. In Shenzhen Anju, real-estate firm China Vanke holds a 20 per cent stake.

Evergrande expects a loss of about 163 million yuan from the disposal of 10,376. The landholding is 82 square meter in Shenzhen.

The land did not generate rental income in 2020 and 2021, and the proceeds will be used to repay debts in respect of the land, according to the company.