(Corrects advisory to show item adds details to June 5 report)
(Reuters) -Evergrande Property Services Group Ltd said on Monday it would have sufficient working capital to meet its financial obligations up to mid-2024 through various measures aimed at boosting liquidity.
These include talks with embattled parent China Evergrande Group on repaying 13.4 billion yuan ($1.89 billion) involved in a pledge, streamlining operating costs, and negotiating with suppliers to extend payables, it said.
“On the basis that all these measures can be implemented successfully … the group will have sufficient working capital to meet its financial obligations” up to June 30 next year, the company added in an earnings statement.
The firm is in focus as its parent, the world’s biggest property defaulter, gave creditors a basket of options in its debt restructuring terms to swap part of their debt into some equity-linked instruments backed by the unit.
The property services unit reported a net profit of 1.42 billion yuan ($199.85 million) for last year, reversing a net loss of 316 million yuan in the previous years, as it posted long-overdue financial results for 2022 and 2021.
The 2022 net profit was still 46.4% lower than the figure for 2020, the year before its parent slipped into a debt crisis.
The firm had total liabilities of 8.7 billion yuan last year, compared to 10.1 billion in 2021 and 7.1 billion in 2020.
In a note, its auditor said net current liabilites of 3.3 billion yuan by the end of 2022 indicated material uncertainties that might affect its ability to continue as a going concern.
Evergrande Property’s shares have been suspended since March 21, 2022, pending its financial results and an investigation into 13.4 billion yuan of seized deposits used as collateral for pledge guarantees by its parent.
The shares will remain suspended until further notice, the firm said in the filing.
($1=7.1069 Chinese yuan renminbi)
(Reporting by Upasana Singh and Clare Jim; Editing by Shounak Dasgupta and Clarence Fernandez)