Evergrande is the most indebted real estate company in the world. A decision is still pending as to whether the Chinese group will be broken up. Now he reported a halving of the losses for the first half of the year.
Evergrande, the world’s most highly indebted real estate group, contained its massive losses in the first half of the year. The Chinese group, which got into trouble two years ago, reported a loss of the equivalent of 4.2 billion euros for the period from January to June – in the same period last year the minus was twice as high. In the same period, the company reportedly increased its sales by 44 percent. The short boom in the real estate market at the beginning of the year had been used successfully, it said.
From Monday, Evergrande shares are to be traded again on the Hong Kong stock exchange. All of the guidelines required by the local stock exchange had been “appropriately” fulfilled, the group said on Friday. All outstanding financial results have now been published. The Evergrande papers have been suspended from trading for more than a year – also because numerous investigations are ongoing.
More than 300 billion euros in debt
According to its own statements, Evergrande currently estimates its debts at around 303.6 billion euros. At the same time, the company’s liquidity is dwindling: Evergrande only has around 515 million euros in cash – compared to around 1.85 billion euros last year.
The group already had great difficulties making interest payments on loans in 2021 – even then the bankruptcy of the real estate giant was feared. So far, however, the company has been able to avert a disorderly collapse. In the USA, Evergrande declared itself insolvent in mid-August and applied for bankruptcy protection as part of its restructuring.
Evergrande has long been the symbol of the crisis in the Chinese construction sector. The industry had been booming since the late 1990s, but many entrepreneurs were becoming increasingly indebted. In 2020, the authorities enacted measures to stop over-indebtedness. Despite this, large property developers continue to fail time and again to complete projects. The largest of them is Evergrande.
Again more support for the real estate industry
A court in Hong Kong is due to decide in October whether the group should be broken up. Evergrande presented a restructuring plan in China in March. Part of this was the offer to the creditors to give them shares in the subsidiaries, such as the electric car subsidiary Evergrande NEV. The leadership in Beijing has tried to support the industry more in recent weeks. Real estate developers are now receiving more loans again and conditions have been relaxed.