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What will become of Evergrande? Its founder promises to pay after skipping deadlines

Date: February 3, 2023 Time: 13:58:29

What will be the future of Evergrande? What will happen to China’s indebted real estate giant? The founder of the company, Xu Jiayin, has once again promised that the group will pay its debts after having breached a self-imposed limit to present its restructuring plan before the end of the 2022 financial year. According to the local press and Efe, Jiayin has sure that “2023 is a crucial year for Evergrande to fulfill its obligations as a company (…). as long as we all work together and do not give up when it comes to resuming construction, sales and operations”, exclusive Xu in a letter to employees quoted last night by the Hong Kong newspaper South China Morning Post.

In the letter, the deactivated executive that in 2022 completed 732 projects and delivered 301,000 homes, meeting its goals for the year. Although Xu did not offer a turnover figure for the year, the sales agreed between January and November reached around 100,870 million euros) that he had obtained in 2020.

Evergrande, which in mid-2021 accumulated a liability of about . The company is embroiled in a campaign to destroy assets by raising as much money as possible while its Hong Kong shares have been frozen since March last year after having lost almost 90% of their value since the beginning of 2021.

Evergrande’s future

After failing to meet its financial obligations, Evergrande incurred in a situation of ‘cross-default’ (“cross insolvency”), in which the default against a single creditor is enough for others to claim the repayment of their loans.

Precisely one of its creditors, who tried to recover some 110 million dollars, filed a liquidation request against Evergrande in June 2022 before the Hong Kong Court, whose next hearing is scheduled for March 20.

The financial position of many Chinese real estate companies worsened after, in August 2020. In recent weeks, given the crisis in the sector, the Government has changed its tone and has announced various support measures, with state banks opening multimillion-dollar lines of credit to various developers.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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