Evergrande Group still without a restructuring plan

Evergrande Group still without a restructuring plan

A restructuring plan for Evergrande Group, China’s second largest real estate developer, was expected to be presented by the end of July.

The company’s latest announcement, however, provides no information about it. Instead, the company only told investors that it could use the assets of its subsidiaries to cover the group’s debts. At the same time, its other liabilities came to light. By mid-2021, balance sheet liabilities had reached about 2 trillion yuan. However, the company still has debts reaching another trillion yuan off the books. In March, banks seized 13 billion yuan from Evergrande Property Services. The company was a guarantor of another company’s liabilities, and the money raised through the guarantee went to Evergrande. In addition, one of Evergrande’s group companies is expected to transfer more than 7 billion yuan to cover previously issued guarantees.

Rating agencies declared Evergrande insolvent last year. It sold more than 700 billion yuan worth of apartments in 2020. Sales reached only 12 billion yuan in the first half of this year. In China, many real estate companies are facing big problems. Sales of the 100 largest may have fallen by as much as half. They lack the money to pay subcontractors and suppliers. As a result, work on construction sites is being halted.

Source: https://www.bankier.pl/wiadomosc/Najslynniejszy-deweloper-swiata-przestal-sprzedawac-mieszkania-8384007.html


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