Evergrande shares fall

Bloomberg

China Evergrande Group’s shares fell the most in two weeks after the company said its debt load increased from the end of last year, falling short on a pledge to remake itself as a leaner company.
The company’s total debt edged up 4% to 835 billion yuan at the end of June, compared with 800 billion yuan at the end of 2019, according to an earnings report released Monday by the Shenzhen-based company. Net debt swelled to a record 631 billion yuan on a weaker cash buffer.
Evergrande in March unveiled an aggressive target to reduce borrowings by half in three years. It has since launched a nationwide sales blitz to recoup cash, raised $3 billion by selling a stake in its service arm and reduced spending on land purchases.
Last week, it expected total investment on electric vehicles to be 29 billion yuan, lower than 45 billion yuan planned earlier.
“We’re confident that total debt, net debt and net gearing will all substantially decline by year end,” Chief Executive Officer Xia Haijun said in an online briefing after the earnings release. He added that borrowing picked up in the first quarter during the pandemic, yet has dropped by 40 billion yuan in the second quarter.
Evergrande’s shares fell as much as 5.3% in Hong Kong trading on Tuesday. Chief Financial Officer Pan Darong said the company will cut borrowings by at least 150 billion yuan each year from 2020 to 2022.