Off the coast of the southern Chinese island of Hainan, one of the world’s largest man-made archipelagoes is a fitting symbol for the ambitions of the highly indebted company that owns it.
China Evergrande’s Ocean Flower Island, an Rmb100bn ($15.5bn) project that is set to fully open next year and includes hotels, theme parks and an opera house, is part of the company’s long-term attempt to expand beyond its main business of building apartments across the country’s sprawling cities.
But Ocean Flower Island, along with an exotic array of non-core assets that include an electric vehicle maker once worth more than Ford and a football club, is also a potential tool in Evergrande’s battle to cut its Rmb674bn debt pile as its ambitions run up against Beijing’s crackdown on leverage in the sector.