China Evergrande has promised to restart the remaining of its 38 stalled property projects by end of September, as per the FT. The distressed developer is trying to alleviate concerns that led to mortgage boycotts by homebuyers on its unfinished projects. The company has already resumed work on 668 of its 706 projects – among this, 606 have reached normal construction level and 62 are in the normalization process. Given the mortgage boycotts in the country, S&P has estimated that in a worst case scenario, banks can face combined mortgage losses of $350bn. Evergrande did not mention how it was funding the construction work which is to be revived. Separately, Alvarez & Marsal was appointed as the receiver for Evergrande’s Hong Kong headquarters. However, details regarding who appointed them were not available. This follows last week’s update where lenders had seized the asset and had appointed a receiver. At that time, details of the receiver were not revealed.
Evergrande’s dollar bonds are trading at deeply distressed levels of 5-7 cents on the dollar.
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