China Evergrande Group (3333. HK), a cash-strapped developer, has started compensating investors in its wealth management products with real estate, according to a unit of its flagship Hengda Real Estate Group Co Ltd arm.
Evergrande is in the midst of a financial crisis, with over $300 billion in liabilities, and is scrambling to raise funds to pay its numerous lenders and suppliers. It has an $83.5 million bond interest payment due on Thursday.
Investors interested in exchanging wealth management products for tangible assets should contact their investment consultants or visit local offices, according to a WeChat post from the company on Saturday.
On Sunday, Caixin, a financial news outlet, said that Evergrande wealth management products are worth an estimated 40 billion yuan ($6 billion). Retail investors are the most common holders of such products.
On Sunday, a customer support representative told Reuters that specific payment methods and details are subject to local constraints.
Wealth management product investors can choose among discounted apartments, offices, retail space, or car parks for repayment, according to a proposal reviewed by Reuters earlier this year that Evergrande could not confirm.
Evergrande compensated 219.5 million yuan in late bills to supplier Skshu Paint Co Ltd (603737.SS) in the form of apartments in three unfinished property projects, according to a stock exchange filing earlier this month.
Evergrande announced on September 10 that it would reimburse all of its matured wealth management products as soon as possible.