China's Hengda Group, which is in default, or default, with debts of over 300 trillion won, announced plans to drastically reduce its core real estate business over the next 10 years and reorganize its business to focus on electric vehicles.



China's state-run Stock Times reported that last night (22nd), Chairman Xu Jian Hengda presented the direction of the company's business reorganization with the aim of reducing the real estate business at an internal meeting of the company.



Chairman Xu Jain said that the real estate business would be drastically reduced, and that real estate sales from 700 billion yuan last year, or 129 trillion won in Korean money, will decrease by more than 70% to 200 billion yuan within 10 years.



Instead, Chairman Xu emphasized that Hengda will transform into a company focused on electric vehicles within 10 years.



Previously, Chinese media reported that Hengda was discussing selling the Hengda car to Xiaomi, which started the electric vehicle business, but Xu's remarks seem to have been denied.



Hengda founded Hengda Motors in 2019, and invested 47.4 billion yuan, or 8.8 trillion won, of Korean money until the end of last year, but has not yet produced a single car.



In this regard, Hengda has mentioned that it will ship its first electric car from its Tianjin plant from early next year.



Chairman Xu Jain's announcement this time is evaluated as showing his plan to transform into an electric car company while maintaining only the legacy of the main real estate business while the Chinese government is suppressing the real estate industry in order to stabilize housing prices.



Hengda has escaped the official default crisis by barely repaying 83.5 million dollars and 98.5 billion won of US dollar bond interest on the day before the end of the grace period for payment today.



However, the liquidity crisis in Hengda has not been fundamentally resolved as debts to be repaid continue while most of Hengda's construction projects have been halted due to financial difficulties. 



(Photo = Yonhap News)