BEIJING, March 22 — China Evergrande Group plans to return land set aside for collateral for a trust loan from CITIC Trust Co to the Guangzhou government, two sources familiar with the matter said today, in a workout arrangement that could be replicated in other parts of China’s indebted property sector.
State-owned Guangzhou City Construction Investment group will act as a guarantor of the loan and CITIC will repay the principal amount to its investors within two years using funds from the Guangzhou city government, the sources said.
A wave of defaults in the property sector has rattled investors and while state intervention has quelled market concern over a disorderly collapse of China Evergrande, investors are still in the dark over whether they will recoup their money. The firm said that due to the “drastic changes” in its operations since the second half of 2021 the auditor has added a large number of additional audit procedures.
Its two Hong Kong-listed units, China Evergrande New Energy Vehicle Group 0708.HK and Evergrande Property Services Group 6666.HK, also said the publication of their financial results will be delayed.
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