China Evergrande, a troubled real estate giant that has become a symbol of debt and excess in the world’s second largest economy Said On Tuesday, it faced “tremendous” financial pressure and hired restructuring experts to “search for all feasible solutions” for its future.
However, the company’s fate remains uncertain, struggling in a country where business problems have attracted direct Beijing attention and often lead to direct interference.
Evergrande’s approval of a sudden change in public finances dropped 12% on shares already hit on Tuesday. The stock has lost more than four-fifths of its value in the past year.
Its diplomatic bonds also plummeted, leaving investors around the world with an investment of about 25 cents per dollar.
Real estate developers have become the biggest turmoil in China for businesses. That fate threatens The real estate sector and China’s broader financial system test regulators’ determination to cleanse the country’s corporate culture.
Evergrande has been hit by a negative barrage of panicked homebuyers and experts warning that defaults are imminent in the last few weeks. We owe more than $ 300 billion to our suppliers, creditors and investors. Hundreds of unfinished real estate developments are scattered across the skylines of cities across the country.
The Evergrande issue, which is one of China’s most important economic growth engines, is questioning China’s real estate market, which is showing signs of flagging. Shares of other Chinese real estate developers also fell after Tuesday’s Evergrande disclosure.
Business and economy
under Regulatory pressure Evergrande is trying to sell parts of its vast empire, including electric vehicle units and real estate management service groups, to wipe out finances and reduce debt.
But on Tuesday, the company said, “I’m not sure if the group can complete such a sale.” He blamed media coverage for the issue, saying that “ongoing negative media coverage” scared homebuyers, disappointed sales this month and put pressure on cash flow.
The fate of China’s Evergrande could ultimately fall into the hands of the Chinese government.
Rating agencies warn that the company is at great risk of failing to meet its loans and other obligations. But more than any other major country, Beijing has better control over its financial system and can stave off creditors for at least a while. The central government controls China’s largest banks and financial institutions and severely restricts the flow of cross-border funds.
Authorities intervened when the previous company stumbled. Beijing 3 years ago Seized controls Authorities of Anbang Insurance Group, which owned a vast overseas empire, including the Waldorf Astoria Hotel in Manhattan, had Detained the chair A few months ago, and he was later Sent to jail For fraud.
Earlier last year, local government officials intervened to take control of HNA, a transportation and logistics conglomerate that was in debt from expensive overseas acquisitions.Under their guidance, the problematic company Pushed into the administration..
Until recently, Evergrande sought a more positive tone, despite expert warnings that developers were approaching defaults.
With rumors swirling online that bankruptcy is imminent and plans to dismiss most of its employees, Evergrande announced a denial on Monday, saying it “is categorically fulfilling its corporate responsibility.”
“Rumors about Evergrande’s bankruptcy and restructuring that recently appeared on the Internet aren’t true at all,” the company said. Said Monday night.
Evergrande warns of financial pressure and hires adviser
Source link Evergrande warns of financial pressure and hires adviser