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Real estate developer China Evergrande Group is set to receive $817.8 million after canceling a contract to build a new stadium for China’s most successful soccer club.
Evergrande initially struck a deal in 2010 to purchase Guangzhou FC — formally known as Guangzhou Evergrande Taobao FC — for $15.5 million.
Ten years later, Evergrande signed a contract to acquire land-use rights for a new stadium in the city of Guangzhou for $1 billion, which included plans to have a seating capacity of 100,000.
- Evergrande had already begun construction on the now-canceled $1.8 billion project.
- It expects to lose roughly $186 million for the total book value of the property.
- A government body had taken over control over the stadium in 2021.
- Rights will go back to the city’s Municipal Planning and Natural Resources Bureau.
The cancellation of the deal comes amid financial woes for Evergrande, which is over $300 billion in debt — more than any other company in the world, according to Markets Insider.
Approximately $20 billion of the developer’s debt is from investors outside China.
Also Struggling
Guangzhou FC has also had financial struggles of its own.
Last year, the club listed all its players on the transfer market in an attempt to raise fresh capital. Evergrande had also considered selling a controlling stake in Guangzhou FC.
The club reportedly has lost between $155 million to $310 million per year as of September 2021.
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