Evergrande’s shares hit 11 year low after announcing no guarantee on repayments
- ByStartupStory | December 6, 2021
The shares of Evergrande Group, Chinese real-estate giant fell by 12% to a new low in more than 10 years. The drop comes after the firm announced that there was no guarantee that it would have enough funds to repay the debt. The shares fell as a 30-day grace period on a coupon payment of $82.5 million due on Nov. 6 comes to an end on Monday.
The top-selling developer is now reeling with more than $300 billion in liabilities. The announce from the firm prompted the government of Guangdong province, where the company is based, to summon Evergrande Chairman Hui Ka Yan, and it later said in a statement it would send a working group to the developer at Evergrande’s request to oversee risk management, strengthen internal controls and maintain normal operations.
The default was due to “liquidity issues arising from the adverse impact of a number of factors including the macroeconomic environment and the real estate industry”, the company said in an exchange filing.
Analysts have warned that one-third of China’s developers could face a similar crisis as the country’s bloated housing market stagnates after a crackdown on reckless borrowing by Xi Jinping’s government in Beijing.
Follow Startup Story
Related Posts
