- With $300 billion in liabilities, Evergrande is the world’s most indebted developer.
- It’s asking sales agents at a Hong Kong development to sell more flats before they can be paid commissions owed on previously sold units.
- Agents who reject the plan may have to wait until April to be paid due to cashflow issues.
Debt-laden developer China Evergrande is asking property agents to sell more apartments at one of its projects in Hong Kong so that it can have the money to pay commission fees for units the salespeople have already sold, the South China Morning Post reported on Thursday.
Under the plan, sales agents will be paid the commissions owed to them for two apartments already sold only after they sell an additional unit of similar value at the Emerald Bay development, according to the SCMP, citing notes from a meeting. The offer applies to the first 30 apartments sold this month at the project, with the outstanding commissions paid 48 to 72 hours of the additional unit sale, the Hong Kong news outlet added.
Agents who reject the plan may have to wait until April next year to be paid, as that’s when a fund matures — although the salespeople will be paid only after “debt collection procedures,” the developer said, per SCMP. Evergrande added it couldn’t guarantee payment in April as well, SCMP reported.
Construction on the 1,982-unit development was recently completed. According to a May report from Hong Kong property agency Midlands, around 77% of the units had already been sold.
Evergrande said the payment delay is due to the company’s issues with cashflow, reported SCMP. Two Hong Kong property agencies have already sued the embattled real-estate developer over unpaid commissions, Reuters reported last month.
With $300 billion in liabilities, Evergrande is the world’s most indebted developer. It has managed to pay off several overdue coupons just in time, averting a default that could send the rest of the sector — and possibly the rest of the world — into crisis. Evergrande founder Hui Ka Yan and the company itself are reportedly rushing to sell assets to raise funds to keep the company going.
Property agents are up in arms over Evergrande’s new commission plan and at least one has said it will not accept it.
“The money that it owes me should always be paid. It cannot propose any new conditions to make me help it sell one extra unit for repaying,” Shih Wing-ching, founder of Centaline — one of Hong Kong’s largest real-estate agencies — told SCMP .
Evergrande did not immediately respond to an Insider request for comment. Centaline told Insider it has no comment.
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