Beijing has ordered state-owned companies to buy heavily indebted Chinese property developer Evergrande’s assets.
The asset purchases are intended to dampen the impact of a messy Evergrande collapse sparking mass social unrest, according to reports in Reuters.
Evergrande is estimated to have $305bn of liabilities on its books, caused by it borrowing heavily to fuel a rapid expansion across China. The firm says it has built around 12m homes in the country.
Guangzhou City Construction Investment Group is close to acquiring Evergrande’s Guangzhou FC Soccer stadium and surrounding residential projects.
Several government-owned enterprises have already scrutinised Evergrande’s assets in the southern Chinese city Guangzhou, one person told Reuters.
The property giant missed a $83.5m interest payment to offshore bondholders last week and has a $47.5m interest payment due on Wednesday.
Fears over the potential fallout of its collapse sent shockwaves through global markets last week. However, estimates of how much its debt is interlaced in the global financial system have tempered, prompting markets to regain most of their Evergrande-driven losses.