Evergrande Real estate china : wikipedia bond, bond default,group subsidiaries, insolvency, dept, automotive, bloomberg
Evergrande Group – Wikipedia
The Evergrande Group or the Evergrande Real Estate Group (previously Hengda Group) is China’s second-largest property developer by sales, and the 122nd largest group in the world by revenue, according to the 2021 Fortune Global 500 List. It is based in southern China’s Guangdong Province, and sells apartments mostly to upper and middle-income dwellers. In 2018, it became the world’s most valuable real estate company.
The holding company of the group is incorporated in the Cayman Islands. Its headquarters are in the Excellence Houhai Financial Center in Nanshan District, Shenzhen.
In August 2021, it was reported that Evergrande Group is facing a record number of cases filed by contractors in Chinese courts as pressure mounts on the company’s management to reduce its $300 billion in liabilities, including around $100 billion in debts. In mid-September 2021 it was reported that the company was in danger of being unable to pay loan interest due on 20 September. It was estimated that around 1,500,000 customers could lose deposits on Evergrande homes that have yet to be built if the company goes under.
On 20 September 2021 shares in Evergrande fell 19% in Hong Kong, an 11-year low point, then partially recovered to 10.2% down at close of trading.
Evergrande Real estate china OverView
|Name||Evergrande Real estate|
|Total assets||CN¥2,301 trillion; (US$306.410)|
|Founder||Xu Jiayin (Hui Ka Yan)|
|Subsidiaries||Hengda Real Estate|
Evergrande Real estate china News
China: What is Evergrande and is it too big to fail?
Global stock markets have been on high alert as crisis-hit Chinese giant Evergrande faces a key test this week.
The world’s most indebted real estate developer is due to make interest payments of $84m (£61m) on its bonds this Thursday.
Earlier in the week, the company started to repay investors in its wealth management business with property as it struggled to find cash to meet its liabilities.
What does Evergrande do?
Businessman Hui Ka Yan founded Evergrande, formerly known as the Hengda Group, in 1996 in Guangzhou, southern China.
Evergrande Real Estate currently owns more than 1,300 projects in more than 280 cities across China.
The broader Evergrande Group now encompasses far more than just real estate development.
Its businesses range from wealth management, making electric cars and food and drink manufacturing. It even owns one of country’s biggest football teams – Guangzhou FC.
Mr Hui has a personal fortune of around $10.6bn, according to Forbes.
Why is Evergrande in trouble?
Evergrande expanded aggressively to become one of China’s biggest companies by borrowing more than $300bn (£217bn).
Last year, Beijing brought in new rules to control the amount owed by big real estate developers.
The new measures led Evergrande to offer its properties at major discounts to ensure money was coming in to keep the business afloat.
Now, it is struggling to meet the interest payments on its debts.
This uncertainty has seen Evergrande’s share price tumble by around 85% this year. Its bonds have also been downgraded by global credit ratings agencies.
Why would it matter if Evergrande collapses?
There are several reasons why Evergrande’s problems are serious.
Firstly, many people bought property from Evergrande even before building work began. They have paid deposits and could potentially lose that money if it goes bust.
There are also the companies that do business with Evergrande. Firms including construction and design firms and materials suppliers are at risk of incurring major losses, which could force them into bankruptcy.
The third is the potential impact on China’s financial system.
“The financial fallout would be far reaching. Evergrande reportedly owes money to around 171 domestic banks and 121 other financial firms,” the Economist Intelligence Unit’s (EIU) Mattie Bekink told the BBC.
If Evergrande defaults, banks and other lenders may be forced to lend less.
This could lead to what is known as a credit crunch, when companies struggle to borrow money at affordable rates.
A credit crunch would be very bad news for the world’s second largest economy, because companies that can’t borrow find it difficult to grow, and in some cases are unable to continue operating.
This may also unnerve foreign investors, who could see China as a less attractive place to put their money.
Is Evergrande ‘too big to fail’?
The very serious potential fallout of such a heavily-indebted company collapsing has led some analysts to suggest that Beijing may step in to rescue it.
The EIU’s Mattie Bekink thinks so: “Rather than risk disrupting supply chains and enraging homeowners, we think the government will probably find a way to ensure Evergrande’s core business survives.”
Others though are not sure.
In a post on China’s chat app and social media platform WeChat, the influential editor-in-chief of state-backed Global Times newspaper Hu Xijin said Evergrande should not rely on a government bailout and instead needs to save itself.
Wall Street marks biggest drop since May as Evergrande crisis intensifies
Wall Street added to the global fall in equities on Monday as the liquidity crisis at Chinese property developer Evergrande shook stock markets in Asia, Europe and the US. The S&P 500 fell 1.7 per cent, marking its worst day of trading since May. It dropped as much as 2.9 per cent earlier on Monday, but recovered some of its losses in late afternoon trading. The sell-off hit the entire market, with just 50 stocks in the benchmark index finishing the day in the green. Energy stocks were the worst hit, along with financial groups and companies that produce basic materials. The technology-heavy Nasdaq Composite slid 2.2 per cent. The CBOE Volatility index, or Vix, which measures expected volatility on the S&P and is known as Wall Street’s “fear gauge”, hit a high of 28.8 — its highest level since May — before falling back to 25.7