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China’s Evergrande Moves from Shenzhen Head Office in Effort to Cut Costs

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China’s Evergrande Moves from Shenzhen Head Office in Effort to Cut Costs
Source: Al Jazeera

Cash-strapped Evergrande, a Chinese real estate conglomerate, has relocated its headquarters from Shenzhen to save money.

Evergrande stated it had relocated to a site it owns but remained in the same city.

It comes as Shimao Group, a competitor, announced on Tuesday that it is in negotiations with possible purchasers for several of its assets in order to decrease its debts.

Following Beijing’s decision to limit their borrowing, the companies have been under a lot of pressure in the previous six months.

Last year, China’s property crisis is projected to have wiped off more than a trillion dollars from the sector’s worth.

Evergrande, the world’s most indebted property developer, is having trouble paying its debts, which total more than $300 billion (£220 billion). It has also skipped payments on its offshore loans.

“To save money, the firm has gone through the lease termination formalities for Houhai Excellence Center in December 2021 and moved to its own property in Shenzhen,” Evergrande said on its website.

“The company’s registration address has not changed and remains in Shenzhen,” the statement continued.

Investors from Evergrande gathered in the foyer of the building in September to demand repayment of debts and financial goods.

On Monday, the Evergrande emblem was observed being removed from the skyscraper’s front.

It maintained, however, that it could avoid defaulting on its onshore yuan bonds for the first time.

This happened as the deadline for bondholders to agree to a six-month postponement on a $706 million payment was extended to Thursday.

Evergrande’s Hong Kong-listed shares had lost over 90% of their value in the previous year as investors were more anxious that the company was on the verge of bankruptcy.

Separately on Tuesday, Shimao, a real estate corporation, disputed a media report that it had reached a preliminary deal to sell the Shanghai Shimao International Plaza, one of its most valuable buildings.

In a statement to the Hong Kong Stock Exchange, the business did declare that it was “in conversations with some possible purchasers and may consider disposing of certain assets if the terms and conditions are right in order to decrease the Group’s debts.”

Shimao’s stock was trading slightly lower on Tuesday, after rising over 20% the day before.