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China’s Evergrande Snowball Debt Crisis by Reuters

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Hong Kong (Reuters)-Some offshore bondholders in the China Ever Grande Group did not receive coupon payments by the end of the 30-day grace period on Monday, New York time, four people aware of the issue. Said.

Failure to pay $ 82.5 million in interest due last month may have indicated the developer’s first offshore default on government bonds.

The event timeline for how Evergrande’s debt crisis unfolded is as follows:

August 2020

Regulators meet with Evergrande and other developers to introduce three debt ratio caps in a scheme called the “Three Red Lines.”

Evergrande has sold $ 3 billion in shares prior to an initial public offering (IPO) of the property management unit. He asked the Guangdong provincial government to approve the backdoor list of Shenzhen, which has been stagnant for four years, and said it could face a cash crisis otherwise.

September 2020

Evergrande offers a 30% discount on properties for one month to increase sales.

October 2020

Evergrande has raised $ 555 million in a streamlined secondary share sale in Hong Kong.

November 2020

Evergrande is ending Shenzhen’s backdoor list plan. Some strategic investors agree not to demand repayment.

Evergrande Property Services Group Ltd’s Hong Kong IPO will raise $ 1.8 billion.

January 2021

China Evergrande New Energy Vehicle Group Ltd has attracted six new investors and raised $ 3.4 billion.

March 2021

Evergrande will sell $ 2.1 billion in the online real estate and automotive market Fangchebao to 17 investors in a pre-IPO transaction. We aim to meet the three debt ratio caps by the end of the year, list Fangchebao by the beginning of the following year, and spin off some units.

June 2021

Evergrande says it will sell its $ 386 million stake in its peer China Calxon Group Co Ltd.

The developer will arrange HK $ 13.6 billion ($ 1.74 billion) to repay interest on maturity and dollar bonds.

Evergrande has achieved one debt cap and reduced interest-bearing debt from 716.5 billion yuan ($ 112.47 billion to $ 89.47 billion) six months ago to about 570 billion yuan.

July 2021

The court ordered the freeze of the 132 million yuan bank deposit held by Evergrande at the request of China Guangfa Bank Co Ltd over financing the developers. Evergrande states that the loan will expire in March and will take legal action.

Some banks in Hong Kong are refusing to lend new loans to buyers of Evergrande’s two unfinished housing projects.

August 2021

Evergrande agrees to sell its shares in the Internet unit HengTen Networks Group Ltd for HK $ 3.25 billion.

The Guangzhou Intermediate People’s Court has centralized the proceedings against the Evergrande Group nationwide, sources said.

Evergrande says it is in talks to sell its shares in Evergrande New Energy Vehicle and Evergrande Property Services.

State media reports that construction of two Evergrande projects in Kunming has been discontinued. One is due to late payments.

Hui Ka Yan has resigned as chairman of the flagship unit Hengda Real Estate Group.

China’s central banks and bank watchdogs have summoned senior management and issued a rare warning that Evergrande must mitigate debt risk and prioritize stability.

Evergrande warns of liquidity and default risks if construction resumes, asset disposals, or loan renewals fail. This is because we are reporting a 29% year-on-year decrease in net income.

September 2021

Chairman Hui promises that buyer Evergrande will complete the construction of the house.

It requires an extension of interest payments on trust loans to creditors, including the CITIC Trust.

Hui pledges to repay all of Evergrande’s mature wealth management products as soon as possible. Investors flock to the lobby of Evergrande’s Shenzhen headquarters to request repayment of the loan.

Evergrande states that online speculation about bankruptcy and restructuring is “not at all true,” but admits “unprecedented difficulties.”

He said he hired a financial adviser to warn of risks beyond default and consider options as real estate sales plummeted.

Hui states that helping individual investors redeem their investment products is a top priority.

Evergrande says it has “resolved” land bond coupon payments, but missed the $ 131 million coupon payment deadline on September 23 and 29.

Chinese Estates Holdings Ltd, Evergrande’s second largest shareholder, said it plans to terminate its holdings. The EV unit warns that it is facing an uncertain future unless it receives a quick cash injection.

Evergrande says it will sell its stake in Shengjing Bank Co Ltd to raise 9.9 billion yuan.

October 2021

Advisers of some Evergrande dollar bondholders (Moelis & Co, an investment bank and Kirkland & Ellis, a law firm) say they want more information and transparency.

Evergrande has missed $ 148 million in coupon payments by October 11.

Hong Kong audit regulators say they are investigating Evergrande’s 2020 accounting and PwC audits.

Reuters reports that state-owned Yuexiu Property has withdrawn from the $ 1.7 billion deal offered to buy Evergrande’s Hong Kong headquarters building.

Evergrande will pay a land bond coupon of 121.8 million yuan, according to sources.

China’s Deputy Prime Minister, central bank, banking and securities watchdogs are trying to reassure the market that the spillover effect of Evergrande’s debt problems on the banking system and the real estate sector is controllable.

Evergrande has abandoned its plans to sell its $ 2.6 billion stake in the services division to rival Hopson Development Holdings Ltd.

REDD reports that the default private bond guaranteed by Evergrande, the Jumbo Fortune Bond, guarantees an extension of at least 3 months.

According to one source, Evergrande will remit funds for a dollar bond coupon that expired on September 23, to avoid defaults before the 30-day grace period expires.

November 2021

Bedeo, a UK-based electronic mobility company, said it has acquired Protean Electric from Evergrande’s automotive division.

Evergrande avoids volatile defaults again with last-minute bond payments.

Evergrande says it will sell its entire stake in streaming service company HengTen for $ 274 million.

Evergrande’s electric vehicle division states that the unit has raised approximately $ 347 million from the sale of shares to fund the production of new energy vehicles.

Government agencies are taking over to sell Evergrande’s football stadium, according to Reuters.

Chairman Hui sold 1.2 billion shares worth a total of HK $ 2.68 billion ($ 344 million) and reduced the stake in a Shenzhen-based real estate company from 77% to 67.9%.

December 2021

Guangdong Province of China summoned the chairman of Evergrande after saying that there was “no guarantee” that the developers had enough money to pay off their debts, and regulators tried to reassure the market.

Evergrande has set up a risk management committee as it approaches debt restructuring.

($ 1 = 7.8006 HK $)

($ 1 = 6.3708 RMB)

China’s Evergrande Snowball Debt Crisis by Reuters

Source link China’s Evergrande Snowball Debt Crisis by Reuters

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