China Evergrande’s snowballing debt crisis

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An exterior view of China Evergrande Centre in Hong Kong, China March 26, 2018. REUTERS/Bobby Yip

HONG KONG, Sept 14 (Reuters) – China’s most indebted property developer Evergrande Group is struggling to resolve its debt disaster, whereas there are rising indicators that policymakers are stepping in to keep away from a tough touchdown for a corporation deemed too huge to fail.

Here’s a timeline of occasions resulting in its debt issues and what the agency has performed to boost funds to date:

Aug 2017

Evergrande vows to chop its debt for the primary time, aiming to slash internet gearing ratio to 70% by June 2020 from 240% in June 2017.

Nov 2018

The central financial institution names Evergrande in a report as one of many few monetary holding conglomerates on its watch that it says might trigger systemic danger.

March 2020

Evergrande targets reducing its debt by 150 billion yuan ($23.3 billion) yearly for 3 years.

Aug 2020

Regulators meet with 12 main property builders, together with Evergrande, in Beijing to introduce caps for 3 completely different debt ratios in a pilot scheme, dubbed “the three pink traces”.

Evergrande sells 28% of its property administration unit for $3 billion in a pre-IPO deal.

It pledges in a letter to the Guangdong provincial authorities to approve a Shenzhen backdoor itemizing plan that has languished for 4 years, warning it will face a money crunch that would result in systemic dangers.

Sept 2020

Firm affords 30% low cost on properties for a month to push gross sales.

Oct 2020

It raises $555 million in a slimmed-down secondary share sale in Hong Kong.

Nov 2020

It terminates the Shenzhen backdoor itemizing plan and strikes an settlement with some strategic buyers to not demand compensation.

Evergrande Property Companies Group’s Hong Kong IPO raises $1.8 billion.

Jan 2021

Electrical car unit China Evergrande New Vitality Car raises $3.4 billion by bringing in six new buyers.

March 2021

Evergrande sells 10% of its on-line actual property and vehicle market Fangchebao to 17 buyers for $2.10 billion in a pre-IPO deal.

It targets to fulfill all three caps on debt ratios by the tip of 2022, and lays out plan to listing Fangchebao by early subsequent yr, and spin off different models together with spring water and tourism.

June 2021

Evergrande says it can promote greater than half of its 58% stake in smaller peer Calxon , price $386 million.

Fitch downgrades Evergrande to ‘B’ from ‘B+’ with a unfavorable outlook.

The developer arranges HK$13.6 billion ($1.75 billion) to repay a maturing bond and curiosity on all different greenback bonds, and it says it can don’t have any additional bonds due earlier than subsequent March.

Evergrande achieves one of many debt ratio caps set by regulators, by reducing its interest-bearing indebtedness to round 570 billion yuan, from 716.5 billion yuan six months in the past.

July 2021

A court docket orders a freeze on a 132 million yuan financial institution deposit held by Evergrande on the request of China Guangfa Financial institution Co (GDDVB.UL). Evergrande says the mortgage isn’t due till subsequent March and it plans to take authorized motion.

Some banks in Hong Kong decline to increase new loans to consumers of two of Evergrande’s uncompleted residential tasks.

Evergrande scraps a particular dividend proposal. S&P cuts its rankings on the corporate by two notches to B- from B+ with a unfavorable outlook.

Fitch downgrades Evergrande to “CCC+” from “B”.

Aug 2021

Evergrande agrees to promote stakes in its web unit HengTen Networks Group Ltd price a complete of HK$3.25 billion.

Moody’s downgrades Evergrande’s company household ranking (CFR) by two notches to “Caa1” from “B2”.

Authorized sources say lawsuits in opposition to Evergrande throughout the nation will probably be centrally dealt with by the Guangzhou Intermediate Folks’s Courtroom.

S&P downgrades Evergrande once more by two notches to “CCC” from “B-“.

The corporate says it’s in talks to promote sure property, included stakes in Evergrande New Vitality Car and Evergrande Property Companies.

State media experiences building work has been halted on two Evergrande tasks in Kunming, one in all them for overdue funds and the opposite was scheduled to ship to homebuyers in October.

Hui Ka Yan steps down as chairman of flagship unit Hengda Actual Property Group which Evergrande says is because of the termination of the backdoor itemizing plan.

China’s central financial institution and banking watchdog summon Evergrande’s senior executives and points a uncommon warning that the corporate wants to cut back its debt dangers and prioritise stability.

Evergrande pledges to do every thing it could to resolve its debt points, and it’ll work to keep up the steadiness of the actual property market.

Evergrande warns of liquidity and default dangers if it fails to renew building, get rid of extra property and renew loans, because it experiences a 29% yoy decline in internet revenue together with non-controlling pursuits to 10.5 billion yuan.

Sept 2021

Chairman Hui Ka Yan, together with the heads of eight process forces set as much as assure house deliveries, lead a pledge-signing ceremony to vow consumers it can full building of their properties.

China Chengxin Worldwide Credit score Score Co (CCXI) downgrades Evergrande and its onshore bonds to “AA” from “AAA”, erasing the bonds’ worth to be used in pledged repo buying and selling because of this.

Moody’s downgrades the company household ranking (CFR) of China Evergrande to “Ca” from “Caa1”, with a unfavorable outlook.

Fitch downgrades Evergrande to “CC” from “CCC+”, flagging a “possible” default.

Evergrande requests extension on belief mortgage curiosity funds to collectors together with CITIC Belief.

Media report that Evergrande will droop curiosity funds due on loans to 2 banks later in September, in addition to funds to its wealth administration merchandise.

Chairman Hui vows in a discussion board to repay all of its matured wealth administration merchandise as quickly as potential.

Indignant buyers crowd the foyer of Evergrande’s Shenzhen headquarters to demand compensation of loans and monetary merchandise.

Some movies circulating on Chinese language social media present what are described as Evergrande-related protests elsewhere in China.

Evergrande says on-line hypothesis about its chapter and restructuring was “completely unfaithful”, however including it was going through “unprecedented difficulties”.

Evergrande says it has engaged monetary advisers to look at its monetary choices and warned of cross-default dangers amid plunging property gross sales.

($1 = 6.4451 Chinese language yuan)

($1 = 7.7794 Hong Kong {dollars})

Reporting by Clare Jim; Enhancing by Sumeet Chatterjee and Jacqueline Wong


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