Evergrande: It is not said that we will have the money to pay the debts
China Evergrande Group said there was "no guarantee" that it would have sufficient funds to meet its debt repayments, while Chinese regulators still try to calm the markets. The news led the Guangzhou regional authorities to convene the top management of the company.
Evergrande, once the best-selling developer in China, is grappling with more than $ 300 billion in liabilities, fueling fears of a potential collapse that could send shockwaves into the country's real estate sector and beyond.
On Friday, the company said, in documents released on the Hong Kong Stock Exchange, it received a request from creditors to pay about $ 260 million in the short term. It is already overdue with the payment of $ 82.5 million in coupons due on November 6.
“In light of the current state of liquidity… there is no assurance that the group will have sufficient funds to continue to meet its financial obligations,” Evergrande said, adding that creditors could request an accelerated repayment otherwise.
This prompted the government of Guangdong, where the company is based, to convene Evergrande president Hui Ka Yan.
Provincial authorities said in a statement that, at Evergrande's request, they will send a working group to the company to oversee risk management, strengthen internal controls and maintain normal operations. Guangdong authorities weren't the only government entity wading into the Evergrande issue on Friday.
In a series of apparently coordinated statements late in the evening, China's central bank, the banking and insurance regulator and its securities regulator tried to reassure the market that any risks to real estate in general could be contained.
"Evergrande's problem was mainly caused by its mismanagement and dizzying expansion," the People's Bank of China said. The short-term risks caused by a single real estate company will not affect market fundraising in the medium and long term, he said, adding that home sales, land purchases and financing "are already back to normal in China."
The China Banking and Insurance Regulatory Commission (CBIRC) said Evergrande's problem will not affect normal industry operations and would increase support for guaranteed rental housing.
He added that he believed domestic and overseas regulators would address Evergrande issues fairly, while the China Securities Regulatory Commission (CSRC) said any capital market fallout was "controllable" and would maintain support.
Evergrande has recently made some overdue payments with funds raised through the liquidation of various assets, with even substantial losses. Obviously this situation could not continue for long. The fact that the markets are then safe is an opinion to be verified, also because in recent days the real estate giant Kaisa has declared that it has problems in paying overdue debts.
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The Evergrande article : it is not said that we will have the money to pay the debts comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/evergrande-non-e-detto-che-avremo-i-soldi-per-pagare-i-debiti/ on Sun, 05 Dec 2021 09:00:29 +0000.