BEIJING, January  10 (TMTPOST)— China Evergrande Group is struggling for cost saving as the debt-ridden Chinese real estate giant stuck in debt default crisis.

Source: Visual China

Evergrande has terminated the release agreement of its headquarters in last December, and moved out Excellence Center, a building located in Nanshan district, Shenzhen city, to its own property, Chinese news media outlet The Paper cited people familiar with the matter on Monday. Most of employees in the functional departments which worked in the headquarters have been relocated back Guangzhou, the former headquarters that the company left in 2019, the news media outlet revealed.  Evergrande has canceled releases of several offices in Shenzhen since last September and didn’t renew the release of headquarters as it expired, according to Chinese newspaper Southern Metropolis Daily the same day.  The paper’s sources also said some of workers in the headquarters would return Guangzhou and others are set to relocate to Tianjing Building, a housing project owned by Evergrande.

Later that day, Evergrande released a statement to confirm it did cease the tenancy in December and moved to a property of its own in the same city. The company explained the move is due to reduce costs and stressed the registered office still lies in Shenzhen.

As the largest real east developer by issuance of offshore, Evergrande has sold US$17 billion of debt in 2020 and its U.S. dollar-denominated debt stood at US$19 billion in 2021, when its liabilities had totaled  US$400 billion and sparked increasing worries about its ability to repay the debt.

Fitch Ratings and S&P cut Evergrande’s rating to “restricted default” and “selective default” in December respectively following its failure to mark coupon payments worth of US$82.5 million for the outstanding U.S. dollar senior notes, triggering a default.  

A filling last week showed Evergrande’s contracted sales in 2021 fell about 39% from a year ago to RMB443.02 billion (US$69.22 billion), the first annual property sales decline in at least a decade.