Ailing Chinese project developer Evergrande has seen the sale of its headquarters to Chinese state-owned Yuexiu Property go to waste, now that the buyer has broken off negotiations. That’s what two sources say to Reuters news agency.
It was a $ 1.7 billion deal that needed to give the ailing group extra breathing space, after several bond payments were missed in recent weeks.
Evergrande is currently carrying over $ 300 billion in debt and has already missed three payments on its international bonds, threatening bankruptcy.
Yuexiu’s Board of directors pressed the stop button in the final phase of the negotiations, as Evergrande’s debt situation could cause complications to bring the transaction to a smooth conclusion, Reuters said.
In 2015, Evergrande was able to buy its headquarters from Chinese Estates Holdings for $ 1.61 billion. The property became the group’s most expensive assets in Hong Kong, with the highest price ever paid per square metre for a commercial property at that time in the city-state.
According to one source, most of the deal was financed by special financial products, so that in a sale the group would receive only a limited amount of cash.