property
China’s real estate giant Evergrande warns of default
Evergrande is considered the world’s most heavily indebted real estate company. Photo: Ng Han Guan / AP / dpa
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The crisis at Evergrande has been worsening for months. The head of the real estate company has now been summoned by the authorities.
The heavily indebted Chinese real estate giant Evergrande has warned of possible payment difficulties.
After a financial review, no guarantee can be given that the group will have sufficient funds to meet its financial obligations, the company said.
The government of the Chinese province of Guangdong, where Evergrande is headquartered, also announced that it had sent a working group to the group to “reduce risks and protect the interests of all parties involved”. Xu Jiayin, the head of Evergrande, was asked to speak to the authorities.
China’s stock exchange regulator tried to allay fears of a spreading crisis. The effects of the events at Evergrande are controllable, according to a statement from the authority.
Evergrande has been in a deep crisis for months and is considered the world’s most heavily indebted real estate company. There is an urgent need to raise funds in order to be able to pay banks, suppliers and bondholders on time. The company is so big that some experts fear a “risk of contagion” for China’s economy and beyond. Further interest payments on bonds will be due in the coming weeks and months.