Last week, Xu said that the company wants to make electric vehicles its main business within a decade. The firm’s Chairman Xu Jiayin has even talked about taking Evergrande in a new direction. The property giant has also resumed work on more than 10 housing projects in southern Guangdong province, which will be delivered to homebuyers “one after another.” Last week, the company made a $83.5 million interest payment on a dollar-denominated bond that allows it to stay out of default, at least for now, according to Chinese state media. This month, the company has demonstrated some attempts to get back on solid footing. Gilles Sabrie/Bloomberg/Getty ImagesĮvergrande wants to build electric cars, not homes The China Evergrande Group logo displayed atop the company's headquarters in Shenzhen, China, on Thursday, Sept. ![]() At the end of September, Evergrande raised $1.5 billion in cash by selling part of its stake in a Chinese bank. With total liabilities of some $300 billion, including $20 billion in international bonds, Evergrande is China’s most indebted real estate company. The crisis started last month with Evergrande’s warning, which sparked fears about which banks and investors across the world might be exposed to its debt mountain. The final - and worst - option would be a disorderly series of defaults, which would send shock waves across China’s economy, and perhaps beyond.įive developers have already run into trouble as China’s once red-hot real estate industry cools rapidly. They could also seek bailouts from the Chinese government.Įarlier this month, the People’s Bank of China said that Evergrande had mismanaged its business, but risks to the financial system were “controllable.” And at financial forum in Beijing last week, Chinese Vice Premier Liu He stressed that risks were generally under control, despite what he called “individual problems” in the property market. The companies could try to restructure their debts and work things out with their lenders. It’s unclear how the crisis will be resolved. Since then, more developers have made similar public confessions, unnerving investors and raising fears of contagion across the vast sector. China Evergrande gave up early gains to fall 6%.China’s real estate crisis isn’t showing any sign of letting up.Įmbattled conglomerate Evergrande rattled global markets in September by warning it could default on its huge debts. Shares in China Evergrande Group's electric vehicle (EV) unit rose as much as 5.8% early on Tuesday, as the cash-strapped developer said it would prioritise the growth of its EV business, before reversing course to slump 3%. Chinese Estates Holdings Ltd said it would book a loss of HK$288.37 million in the current financial year from its latest sale of bonds issued by Chinese property developer Kaisa Group Holdings Ltd. ![]() The prospect of contagion and more defaults have weighed on the sector in a major setback for investors. ![]() "The question is always, who's next?" Shares of Chinese property shares extended losses, hurt also by concerns over plans to introduce a real estate tax.Ĭhina's CSI 300 Real Estate Index fell 2.6%, and the Hang Seng Mainland Properties Index slumped nearly 5%. This follows a default by Fantasia Holdings Group on a maturing dollar bond in early October that heightened concerns in international debt markets, already roiled by worries over whether Evergrande would meet its obligations.ĭevelopers are defaulting "one by one", said an investor with exposure to Chinese high-yield debt, who asked not to be named as he was not authorised to speak with media. Modern Land (China) Co Ltd said in a filing that it had not repaid principal and interest on its 12.85% senior notes that matured on Monday due to "unexpected liquidity issues". HONG KONG: Modern Land reported a missed payment on Tuesday, the latest Chinese property developer to do so, adding to worries about spiralling effects of the debt crisis at behemoth China Evergrande Group and dragging on shares in the sector.Ĭhina's state planner was to meet with property firms carrying large dollar-denominated debts later in the day to take stock of their total issuance volume and repayment capability, amid the mounting concerns about liquidity.Įvergrande, which narrowly averted a costly default last week, is reeling under more than $300 million in liabilities and has a major payment deadline on Friday. ![]() Headquarters of the China Evergrande Group in Shenzhen.
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