Evergrande venue work to weather fiscal storm

Image: Thomas Suen (Reuters)

The real estate giant of China – Evergrande – is in a financial quagmire. Nevertheless, work on a China Evergrande Group (3333.HK) project in the Southern City of Guangzhou (China) to build one of the world’s largest soccer stadiums is proceeding “as normal” – the Guangzhou Evergrande Football Stadium.

The ‘BILD’ stated that meanwhile, Evergrande does not seem to have come out of its financial woes. Not only have the company’s shares been suspended from trading on the Hong Kong Stock Exchange – according to a media report, the ailing group is also close to a billion-dollar share sale.

The Guangzhou Evergrande Football Stadium is a football stadium under construction in Guangzhou, China as the future home venue of Chinese professional club Guangzhou F.C. The construction of the 12 billion yuan (US$1.7 billion) stadium began on April 16^th, 2020. The design of the lotus-shaped stadium was that of Shanghai-based American architect Hasan Syed. The stadium has a seating capacity for 100,000 people and a planned opening set in December 2022.

The Guangzhou Football Club, formerly known as Guangzhou Evergrande Football Club, is a professional Chinese football club that participates in the Chinese Super League under the license of the Chinese Football Association – so owned by the Evergrande Company, which is in big trouble now. In fact, the Evergrande Real Estate Group is the majority shareholder of the top-flight – 56.71 percent.

The ‘Reuters’ stated that construction on the Guangzhou F.C. Soccer Stadium, which was set to cost around 12 billion yuan ($1.86 billion), began in April last year and is expected to be over by 2022.

A spokesman of China Evergrande stated, “Construction work on the soccer stadium is still proceeding as normal and in an orderly manner.”

The ‘Reuters’ further stated that the stadium would have a capacity of over 100,000, which would make it the world’s largest purpose-built soccer venue by capacity.

“The world’s eyes are on it. How could the biggest soccer stadium in the world not be built? It won’t become a waste construction site. The Government wouldn’t let this happen,” the owner of a small store nearby surnamed Zhao said.

The ‘BILD’ further stated that Evergrande is the second largest real estate developer in China and has financed its rapid growth with credit over the past few years. The group has accumulated debts of more than 300 billion dollars (around 258 billion euros) and is in default. Investors worry that a breakdown will have profound consequences for the financial system and other industries.

Should the impending bankruptcy become a reality, it would trigger a banking crisis in China.

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