Real estate company China Evergrande Group EGRNF is facing more issues and has been told to tear down some its buildings that were constructed on an island in China.
The 39 buildings are located on an artificial archipelago called Ocean Flower Island, according to a Wall Street Journal article.
The buildings consist of houses and hotels as well as an estimated 1.1 million square foot convention center built that is meant to look like blooming peonies.
The company said in a statement on Tuesday that it received the order to tear down the buildings. The order was issued by local authorities in the island province of Hainan and said that Evergrande’s subsidiary obtained permits to build them illegally.
Evergrande has 10 days to complete the demolition or 60 days to file an appeal.
“The company will actively communicate with the authority in accordance with the guidance of the decision letter and resolve the issue properly,” Evergrande said in a stock exchange filing
The authorities from Danzhou, a city in Hainan, said that the manmade island was inflicting damage to the coral reefs.
Evergrande has about $300 billion in liabilities as of June 30 and faces many financial roadblocks since it has been unable to make several interest payments on its U.S. dollar bonds.
The company’s financial woes means it has “largely halted sales of new homes,” impacting its revenue, the article said.
Evergrande said Tuesday its contracted sales totaled $69.7 billion in 2021, a decline of almost 39% drop from a year ago.