The ailing Chinese real estate company Evergrande wants to pay off investors with real estate in an emergency. One company division announced that this procedure has already begun. Via the messenger service Wechat, the group stated that investors who are interested in the return of asset management products for material assets should contact their investment advisor or visit a local branch.
It’s about big sums: the financial magazine Caixin According to Evergrande, there is an estimated 40 billion yuan in asset management products outstanding, or around 5.3 billion euros. Such products are typically held by retail investors.
Specific payment methods and details are dependent on local conditions, said a customer service representative. According to a proposal, which was not confirmed by Evergrande, investors can choose between discounted apartments, offices, retail space or parking spaces for the repayment.
Late interest payments, then the price collapsed
The second largest real estate developer in China is currently trying desperately to raise fresh funds in order to be able to pay its numerous banks, suppliers and bondholders on time. He suffers from more than $ 300 billion in debt.
On Saturday, the group also admitted misconduct by some executives. They would have prematurely replaced the company’s investment products. The processes were very serious and the managers were asked to repay the funds received early.
Evergrande defaulted on bond interest payments in June. The subsequent downgrading of the credit rating by rating agencies caused the share price to collapse. Since the beginning of the year, the Group’s share value has fallen by three quarters. On this Monday, the stock exchanges in China will be closed due to public holidays. The Chinese central bank and the financial regulator called on Evergrande management in August to reduce debt and stabilize the group. It remains to be seen whether this can succeed. On Monday last week, angry investors stormed the lobby of the Evergrande headquarters in Shenzen and asked for their money back.