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China - Real estate problem developing since late 2020 coming home in Evergrande financial problems? - ordered to liquidate Jan. 29, 2024

sharon sanders

sharon sanders

Editor-in-Chief & President
Indebted China Evergrande faces risk of loan defaults, legal action, billionaire chairman Hui Ka-yan admits as profit tanks
  • The world’s most heavily indebted home builder has suspended construction at some projects, says Hui, as half-year profit plummets by 29 per cent
  • The Shenzhen-based developer can now only hope to survive, not make profit, says Ivan Li of Loyal Wealth Management
The billionaire chairman of the world’s most indebted developer, China Evergrande, has admitted his company faces the risks of defaulting on loans and legal action from creditors.

Hui Ka-yan, who founded the Shenzhen-based home builder in 1996, made the rare admission in an earnings statement on Tuesday as Evergrande reported a dramatic plunge in profits. The high-profile tycoon also revealed that construction work had been halted at some of the developer’s projects.

more..

zhttps://www.scmp.com/business/companies/article/3147074/indebted-china-evergrande-faces-risk-loan-defaults-legal-action

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SHANGHAI, Sept 6 (Reuters) - Bonds issued by indebted developer China Evergrande Group (3333.HK) slumped on Monday after a ratings downgrade led to restrictions on their use as collateral, prompting China's stock exchanges to halt trade.

The Shanghai Stock Exchange said in a statement that it had temporarily suspended trading in China Evergrande Group's 6.98% July 2022 corporate bond following "abnormal fluctuations." The exchange had also suspended trading in the bond on Friday.

https://www.reuters.com/business/chi...mp-2021-09-06/

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Please see:

China - New tax law on deed transfers to take effect nationwide September 1, 2021

China - News of "stop lending" and "longer mortgage lending cycle" has attracted market attention - July 16, 2021

China - Banks in Shenzhen & Guangzhou limiting mortgage business and Shanghai banks not writing any more mortgages this month. January 26, 2021

China - Only 21 banks failed the financial stress test - November 6, 2020

China - "Notice on Promoting the Stable and Healthy Development of the Real Estate Market" to regulate the real estate market in Taizhou, Zhejiang province - November 3, 2020

China - Beijing: Land supply has fallen for three consecutive quarters, and transaction prices have also fallen for two consecutive quarters. - October 13, 2020
 
Imho these rating companies are reactionary and not predictive, but here is this:


RATING ACTION COMMENTARY

Fitch Downgrades Evergrande and Subsidiaries, Hengda and Tianji, to 'CC'


Tue 07 Sep, 2021 - 9:14 PM ET



Fitch Ratings - Hong Kong - 07 Sep 2021: Fitch Ratings has downgraded to 'CC', from 'CCC+', the Long-Term Foreign-Currency Issuer Default Ratings (IDR) of Chinese homebuilder, China Evergrande Group, and its subsidiaries, Hengda Real Estate Group Co., Ltd and Tianji Holding Limited. Fitch has also downgraded the senior unsecured ratings of Evergrande and Tianji to 'C', from 'CCC', with a Recovery Rating of 'RR6', as well as the Tianji-guaranteed senior unsecured notes issued by Scenery Journey Limited to 'C', from 'CCC', with a Recovery Rating of 'RR6'.



The downgrade reflects our view that a default of some kind appears probable. We believe credit risk is high given tight liquidity, declining contracted sales, pressure to address delayed payments to suppliers and contractors, and limited progress on asset disposals.

more...

https://www.fitchratings.com/resear...e-subsidiaries-hengda-tianji-to-cc-07-09-2021
 
Early morning announcement! Evergrande Group: All monies redeemed in advance by 6 managers must be returned within a time limit


September 18, 2021 06:35







　　Original title: Early Morning Announcement! Evergrande Group: All monies redeemed in advance by 6 managers must be returned within a time limit
　　In the early morning of September 18, the official website of Evergrande Group issued an announcement, regarding the early redemption of Evergrande wealth investment products by some managers, the group company attached great importance to it. And severely punished . The full text is as follows:
　　As of May 1, 2021, a total of 44 executives at the headquarters of Evergrande Group, the assistant to the president of various industry groups at the time, the chairman and general manager of the provincial companies of the real estate group, and the executives at the time when the deputy general manager of Evergrande Wealth . Holds 58 investment products of Evergrande Wealth; from May 1st to September 7th, among the above-mentioned management personnel, 9 investment products of 8 people were paid normally, and 9 people newly subscribed for 13 investment products. 6 people redeemed 12 investment products in advance; as of September 8, 39 people still hold 50 investment products of Evergrande Wealth.
　　Regarding the early redemption of Evergrande Wealth Investment Products by some managers, the group company attaches great importance to it, and has requested that all the funds redeemed by the six managers in advance must be returned within a time limit and severe penalties will be imposed .
　　The group company requires Evergrande Wealth to strictly follow the announced redemption plan to ensure fairness and impartiality. At the same time, the middle-level and above employees of Evergrande Wealth must stick to their posts and continue to do a good job in customer service.
a2fb-97bf19ffe86936a81602f528bbac777f.png
Image source: Evergrande Group official website​


　　The Daily Economic News previously reported that on September 10, Xu Jiayin made it clear at the Evergrande Wealth Conference that it is necessary to ensure that all due wealth products are fully redeemed as soon as possible, and that a penny cannot be less.
　　Xu Jiayin said that at present Evergrande has encountered unprecedented difficulties, but the fundamentals of Evergrande have not changed: the strong combat effectiveness of the staff has not changed, the land bank with sufficient scale and reasonable layout has not changed, and the ability to build high-quality communities has not changed. Big is still the original Evergrande, and the fundamentals of annual sales of 700 billion yuan have not changed. Next, leading cadres at all levels of Evergrande should lead all employees to resume work and production, ensure the delivery of buildings, do their best to sell, and resume normal operations. This is also the greatest guarantee for the redemption of Evergrande wealth products.
　　Xu Jiayin emphasized that in the redemption process, we must be fair and just, and no one is allowed to engage in specialization. It has never happened before and will never happen in the future. We must do everything possible to make the redemption earlier than planned according to the established redemption plan.
​


　　Caixin.com reported on September 13 that on the evening of September 12, Evergrande Wealth Executive Director and General Manager Du Liang admitted that he did redeem Evergrande Wealth wealth management products on May 31, and the early payment was due to an emergency at home.

zhttps://finance.sina.com.cn/chanjing/gsnews/2021-09-18/doc-iktzscyx4907691.shtml
 
September 20, 2021


Stock market news live updates: Stock futures sink amid China's Evergrande default risk, debt ceiling debates


U.S. stock futures sold off Monday morning, tracking declines in overseas equities as investors nervously eyed the potential ripple effects of the default of a major Chinese real estate company and ongoing debates over the debt limit in Washington.

Dow futures sank by more than 500 points, or 1.6%, in early trading. S&P 500 futures also dropped by more than 1%, adding to losses from last week. The CBOE Volatility Index, or Vix (^VIX), jumped by more than 30% as a confluence of concerns roiled markets.

Shares of China Evergrande Group (3333.HK) plunged by more than 10% on the Hong Kong Stock Exchange as fears mounted that the Chinese real estate juggernaut would collapse under a major debt burden, impacting shareholders, bondholders and potentially triggering turmoil elsewhere across global markets. The specter of a broader crackdown by the Chinese government on Hong Kong's real estate sector further added to concerns.

more..

https://finance.yahoo.com/news/stock-market-news-live-updates-september-20-2021-105919123.html
 
DOW futures are up this morning........


snip

Wall Street has found something scarier than tapering, taxes, and China Evergrande Group combined. It’s called the 50-day moving average.

The predictions of impending doom from Wall Street’s talking heads continued this past week. The reasons for a pullback are many: The stock market has rallied for too long and has gone up too smoothly, the Federal Reserve is about to remove the bond buying that has helped prop markets up, taxes are ready to rise, economic data are slowing. None of it really left a mark.

https://www.marketwatch.com/article...d-contagion-51631925838?mod=mw_more_headlines
 
I think they are going to try to kill this zombie.

https://www.bloombergquint.com/china/china-is-said-to-weigh-breaking-up-evergrande-to-contain-crisis
China Weighs Breaking Up Evergrande to Contain Property Crisis
11:07 AM IST, 27 Jan 202212:58 AM IST, 28 Jan 2022

(Bloomberg) -- Chinese authorities are considering a proposal to dismantle China Evergrande Group by selling the bulk of its assets, according to people familiar with the matter.

The restructuring proposal, submitted to Beijing by officials in Evergrande’s home province of Guangdong, calls for the developer to sell most assets except for its separately listed property management and electric vehicle units, the people said, asking not to be identified discussing a private matter. A group led by China Cinda Asset Management Co., a state-owned bad debt manager and major Evergrande creditor, would take over any unsold property assets, the people said.

If approved by senior officials in Beijing, the plan would mark the biggest step yet by Xi Jinping’s government to prevent a disorderly collapse of the world’s most indebted developer from roiling China’s financial markets and economy before a closely watched Communist Party leadership transition later this year...
 
China Evergrande EV unit to issue fresh shares in restructuring plan
  • China Evergrande New Energy Vehicle Group (NEV) will issue an aggregate of 5.44 billion new shares in the unit for HK$3.84 per NEV share
  • The fresh issue is intended to pay off loans of NEV due against China Evergrande and its founder Hui Ka Yan
Published: 12:05am, 15 Aug, 2023
​

Embattled property developer China Evergrande Group said on Monday its listed electric-vehicle (EV) arm has agreed to issue new shares to certain subscribers to ease the loan burden and improve liquidity as part of its restructuring proposal.

Under the terms, China Evergrande New Energy Vehicle Group (NEV) will issue an aggregate of 5.44 billion new shares in the unit for HK$3.84 per NEV share, pooling an amount of HK$20.89 billion (US$2.67 billion).

The fresh issue is intended to pay off loans of NEV due against China Evergrande and its founder Hui Ka Yan, and his unit Xin Xin (BVI) Ltd, among others.
​
more.... https://www.scmp.com/business/artic...ev-unit-issue-fresh-shares-restructuring-plan
 
What happens next after China Evergrande ordered to liquidate?

29 Jan 2024 10:47AM(Updated: 29 Jan 2024 11:11AM)
​


HONG KONG: A Hong Kong court on Monday (Jan 29) ordered China Evergrande, the world's most indebted developer, to be liquidated.

The move could send shockwaves through already fragile Chinese capital and property markets. Such a process could be complicated, with potential political considerations, given the many authorities involved.

more... https://www.channelnewsasia.com/bus...t-happens-next-court-chinese-property-4081711

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