The Chinese real estate giant Evergrande on 20 September it will not be able to pay interest on its debts. The Chinese Ministry of Housing and Urban-Rural Development reported to the main ones banks that the company, struggling with a severe liquidity crisis it’s a debt of 305 billion dollars, he will not be able to “pay interest on loans,” he said Bloomberg, citing sources close to the dossier. The group – which sank on the Hong Kong stock exchange over rumors of potential bankruptcy – is in talks with lenders about extending payments and renewing some loans. The same ministry convened a meeting with the banks this week.
China’s second largest real estate developer faces a mountain of $ 305 billion in debt with cash flows “under enormous pressure” and avoid a devastating tsunami effect on the country’s financial system. Tuesday was a day on the roller coaster on the stock market for the company, after the release of a file blaming the liquidity crisis “the continuous negative reports of the media” that “hit the confidence of potential buyers of real estate properties. There are also negotiations with potential investors for the sale of assets, in the absence, however, of “significant progress”. The announcement matured a few hours after the first protest of hundreds of angry small investors who besieged the Shenzhen headquarters on Monday. Videos posted on social media in Mandarin showed a crowd shouting “give us our money back” amid loan repayments and financial products.
In June, Evergrande failed to pay interest on a bond while Moody’s e Fitch they sharply cut the creditworthiness rating of the debt. The group, founded by Xu Jiayin, has experienced unstoppable growth for twenty years since its founding in 1996 in Guangzhou under the name Hengda Group, supported mainly by funding. 62-year-old Xu, known as Hui Ka Yan in Cantonese, he is an entrepreneur who started from nothing to become one of the richest men in China, with a fortune estimated by Forbes at 11 billion dollars. Evergrande Real Estate currently owns more than 1,300 projects in more than 280 cities across the country, according to the company’s website, with assets that go far beyond simple real estate development: from production of electric cars, to the media, to food and beverage companies and football teams, including Guangzhou Fc, the multi-champion Chinese and Asian team coached in the past by Marcello Lippi and now by Fabio Cannavaro.
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