There is something tragic yet inevitable about Evergrande’s staggered demise. The debt-laden Chinese property developer’s chances of surviving in its current shape are receding rapidly.
Just this week, it hired two restructuring advisers and warned the Hong Kong Stock Exchange that monthly sales halved between June and August, to Rmb38.1 billion ($5.9 billion). Furious shareholders marched on its headquarters in Shenzhen, demanding compensation on Rmb40 billion in wealth management products.
In a desperate attempt to reduce its $89 billion debt pile, Evergrande is seeking to sell non-core assets, including an electric vehicle unit, and trying to get irate investors to accept properties at steep discounts in lieu of cash repayments.
If you think you know what the market will be like in China in two, five or 10 years’ time, you are deluding yourself
There are shards of good news. None of the firm’s $14 billion worth of offshore debt is due this year.
