China Evergrande says debt level to drop close to year-end target by end-June

HONG KONG: China's most indebted property developer Evergrande Group said its debt will drop to below 600 billion yuan (US$93.73 billion) by the end of this month, coming close to its year-end target of 560 billion yuan.

China Evergrande has been scrambling for cash as Beijing tackles what it considers excessive borrowing in the real estate development sector with planned new debt-ratio caps dubbed the "three red lines".

The company, with interest-bearing indebtedness standing at 716.5 billion yuan at the end of 2020, has vowed to reduce its debt by 20per cent, or 150 billion yuan, this year.

Chairman Hui Ka Yan told the company's business partners in an annual meeting on Thursday Evergrande will be able to achieve this month one of the three debt ratio caps set by regulators.

The developer has targetted to achieve the other two requirements by the end of 2021 and 2022, respectively.

Evergrande shares dropped 0.9per cent on Friday mid morning, compared to a 0.3per cent fall in the Hang Seng Index.

(US$1 = 6.4013 Chinese yuan)

(Reporting by Clare Jim; Editing by Ana Nicolaci da Costa)