10, Evergrande Real Estate Group Co., Ltd. issued several reports in succession. Including the annual report of bonds in 2022, the semi-annual report of bonds in 2022, the annual report of bonds in 2021, the annual audit report of Hengda Real Estate in 2022 and 2021, and the semi-annual financial report of Hengda Real Estate in 2022. According to
the financial data, the net loss of Hengda Real Estate in 2022 was 52.720 billion yuan, and as of December 31, 2022, the total current liabilities were 16787 47 billion yuan, while the total monetary capital of the company was 9.173 billion yuan. The total liabilities of the Company are 18338 RMB 0.119 billion, and the total assets are 14685 RMB 0.57 billion. The Company is insolvent.
The report shows that by the end of 2022, Evergrande has a land reserve of 170 million square meters. Evergrande Real Estate said that it would concentrate on promoting the resumption of production and guaranteeing the delivery of buildings, striving for the understanding and support of regional governments and upstream and downstream partners, intensifying the disposal of assets, striving to activate funds, streamlining the organization, optimizing the personnel and salary structure, and further saving costs; China Evergrande Group actively communicates with creditors at home and abroad, employs financial consultants to evaluate the company's situation, and explores the best overall debt solution for all stakeholders.
Total liabilities 1.8 trillion, Evergrande Real Estate: Insolvent
Evergrande Real Estate said that in 2021, due to the combined impact of multiple adverse factors such as macroeconomic environment, industry environment and financing environment, the company fell into the liquidity dilemma of debt default. In 2022, due to many uncertain factors, the progress of the debt risk mitigation plan of the Company fell short of the plan. Due to the continuous impact of the liquidity crisis, the Company continued to suffer losses and was insolvent in 2022, which had a significant impact on the normal production and operation of the Company.
As of December 31, 2022, the total current liabilities of the Company amounted to RMB1,678.747 billion, and the total cash and bank balances (including cash and cash equivalents and restricted cash) of the Company amounted to RMB9.173 billion.
In addition, the Company is involved in a number of litigation and arbitration cases for various reasons. The above indicates that there are a number of material uncertainties that may cast significant doubt on the Company's ability to continue as a going concern.
In view of the above, the management of the Company has carefully considered the expected cash flow forecast of Hengda Real Estate for not less than 12 months from the reporting period, and has fully considered the matters that have significant doubts about its ability to continue as a going concern, so it has actively proposed debt solutions to alleviate the liquidity pressure. Evergrande Real Estate will continue to implement the following plans and measures:
(1) Evergrande Real Estate has actively negotiated with other domestic lenders on the loan extension. As the lenders are scattered and the market environment is constantly changing, it still needs time to determine the extension plan with individual lenders one by one; Taking into account the successful extension of the loan in 2022, the credit history of Hengda Real Estate and the long-term cooperative relationship with the relevant lenders, the management believes that Hengda Real Estate will be able to gradually complete the signing of the relevant remaining loan extension agreements;
(2) Hengda Real Estate has been actively seeking new financing or additional capital inflow through various channels, including but not limited to new financing from asset management companies or financial institutions, special loans and supporting loans for guaranteed delivery, business cooperation with business partners, asset disposal, etc. As of the date of this report, Evergrande Real Estate has achieved certain business cooperation through the above channels, and has obtained new financing or additional funds for certain projects. Hengda Real Estate will also continue to seek new financing or additional capital;
(3) Hengda Real Estate has been actively communicating with creditors to resolve pending litigation. As of the date of approval of the financial statements, Evergrande Real Estate has completed the reconciliation arrangement with some creditors. Hengda Real Estate is confident that it can continue to reach an amicable solution to the litigation that has not yet reached a definite result at this stage;
(4) In response to the call of the local government to ensure delivery, Hengda Real Estate will continue to focus on the completion and delivery of real estate projects to ensure the stable and sustainable operation of Hengda Real Estate's business.
(5) On April 3, 2023, China Evergrande, the intermediate holding company, and AHG entered into a Restructuring Support Agreement ( "RSA") with respect to the terms of the Restructuring. The proposed restructuring is intended to (I) provide China Evergrande with a long-term, sustainable capital structure; (II) provide sufficient financial flexibility and sufficient liquidity to stabilize the business; and (III) safeguard the rights and interests of all stakeholders and maximize value. The Proposed Restructuring Group will implement the overseas debt restructuring through the Hengda Agreement Arrangement, the Tianji Agreement Arrangement and the Jingcheng Agreement Arrangement, and Hengda Real Estate will continue to follow up the proposed debt restructuring of overseas subsidiaries that have not yet been completed.
The report shows that the contract sales amount of Evergrande Real Estate in 2022 is 28.181 billion yuan. As of December 31, 2022, the company has a land reserve of 170 million square meters. In addition, the Company also participated in 79 renovation projects, including 55 in the Greater Bay Area (34 in Shenzhen) and 24 in other cities.
It is worth noting that the accounting firm has issued an audit report for Hengda Real Estate, which is unable to express an opinion, because of the cumulative impact of the above uncertainties on the financial statements caused by the possible interaction between them. We are unable to judge whether it is appropriate for Evergrande Real Estate Group to adopt the going-concern assumption to prepare the financial statements. As of December 31, 2021, we were unable to obtain sufficient and appropriate audit evidence for the change in accounting treatment due to the liquidity difficulties and staff turnover of
Evergrande Real Estate Group. Given the significance and prevalence of these matters, we were unable to obtain sufficient appropriate evidence to provide a basis for an opinion on the financial statements. The comparative figures presented in the
consolidated and corporate income statements, consolidated and corporate cash flow statements, consolidated and corporate statements of changes in owner's equity and related notes to the financial statements may contain material misstatements and therefore may not be comparable with the figures for the current year.
Therefore, we are unable to express an opinion on the consolidated and company income statement, consolidated and company cash flow statement, consolidated and company statement of changes in owner's equity and notes to the relevant financial statements of Evergrande Real Estate Group for the year ended December 31, 2021. A total of 301,000 units were delivered
throughout the year. Xu Jiayin held a meeting
to guarantee the delivery of buildings. Evergrande Real Estate said that in 2022, the state intensively launched various support and relief policies, and the market showed a bottoming trend, which created favorable conditions for the industry to resolve risks. China Evergrande Group will take stable operation and reducing risks as the first priority, actively promote the work of guaranteed delivery with the greatest efforts, obtain the understanding and support of local governments, upstream and downstream enterprises, owners and other parties, and achieve the full resumption of 732 guaranteed delivery projects, with a total of 301,000 units delivered throughout the year.
Looking into the future, the Company will resolutely assume the main responsibility of self-rescue and risk-elimination, and do a solid job in guaranteeing the delivery of buildings; accelerate the restructuring of domestic foreign debts and other work to protect the long-term interests of various creditors; continue to improve internal risk control and management efficiency, stabilize the team, and steadily promote daily operations.
(1) Make every effort to promote the resumption of work and production and guarantee the delivery of buildings, and strive for the understanding and support of regional governments and upstream and downstream partners;
(2) Increase the intensity of asset disposal and strive to activate funds;
(3) Streamline the organization, optimize the personnel and salary structure, and further save costs;
(4) China Evergrande Group actively communicated with domestic and foreign creditors, hired financial consultants to evaluate the company's situation, and explored the best overall debt solution for all stakeholders.
Earlier, on the evening of July 17, China Evergrande also reissued its interim performance announcements for 2021, 2022 and 2022, with a total net loss of 812 billion yuan and a total debt of 2.4 trillion yuan. This has also aroused heated discussion in the whole network, and every move of Xu Jiayin, chairman of the board of directors of Evergrande Group, has also attracted much attention. At 5:00 p.m.
on July 24, Xu Jiayin organized a meeting of Evergrande to guarantee the handover of buildings, which lasted for more than half an hour. At the meeting, Xu Jiayin inquired about the security situation of several regional companies.
An insider close to Evergrande told the reporter that at present, one of the main tasks of regional companies is to cooperate with local special classes to revitalize assets and complete the work of guaranteeing the delivery of buildings. At present, the task of guaranteeing the delivery of buildings for some projects is basically nearing the end. According to the people
familiar with the situation, in order to complete the guaranteed delivery, some regions have cross-regional asset mortgage to finance.
"At present, there are not many uncompleted residential projects of Evergrande, some of which are mainly cultural tourism projects located in Kunming, Guiyang and other places.". In addition, there are some unsold projects, which are basically offset housing, because the government does not recognize them, they are not within the scope of guaranteed delivery. The person familiar with the matter said.
浙公网安备33010802003254号