Chinese Evergrande Stadium taken over by the government

A state body has taken over the China Evergrande Group's soccer stadium to sell, a person with direct knowledge of the matter told Reuters as the indebted real estate developer struggles to meet its debt.

Evergrande, which is struggling to repay over $ 300 billion in debt, is also considering selling the loss-making Guangzhou Football Club, the person said.

Construction of the 12 billion yuan ($ 1.86 billion) in Guangzhou Evergrande football stadium began in April last year and should be completed by the end of 2022.

Evergrande has stopped construction because of a lack of capital and has given control to the authorities who are selling the stadium or, if no buyer can be found, buying it through the state-run Guangzhou City Construction Investment Group, the person who did not want to be named said the matter is not public.

Another person familiar with the matter said construction had been suspended for at least three months.

Evergrande declined to comment. In September the company said work on the stadium would continue "normally".

The Guangzhou City Government did not respond to calls from Reuters. Guangzhou City Construction Investment did not respond to a faxed request for comment.

TENTERHOOKS

Evergrande was once the top-selling real estate developer in China, but is now struggling to pay creditors and suppliers. Local governments across China control the sale of some of its assets, people familiar with the matter told Reuters.

Evergrande's difficulty in repaying overseas bonds has rocked the markets and rocked the entire real estate sector through a series of developer defaults and credit downgrades.

Evergrande managed to avert its bankruptcy last month, so investors eagerly await the company's ability to meet its obligations to pay an overdue coupon of $ 82.5 million before a 30-day grace period expires on December 6 .

EXIT

Evergrande acquired control of Guangzhou FC for 100 million yuan in 2010 and saw the club's value fluctuate at 19 billion yuan before being delisted in March. However, given the financial plight of its owner, the club had to accept some high-profile departures.

In September, the eight-time Chinese Super League champions announced that head coach Fabio Cannavaro had left the club by mutual agreement. Brazilian-born striker Ricardo Goulart, who took Chinese citizenship to help China win the World Cup, terminated his contract with the club, Reuters reported this month.

Since August, an Evergrande-owned football school has laid off more than 100 employees due to liquidity constraints, said one person close to the school and one person with direct knowledge of the layoff situation. Both declined to be identified due to the sensitivity of the matter.

Foreign trainers and translators have been asked to leave the school, the second person said, adding that the school had liabilities of around 2 billion yuan at the end of December 2020.

It is unclear how many people the school employed before or after the layoffs. A person close to Evergrande said the school continued to operate normally.