Evergrande. – TVN24 Biznes

Evergrande shares fell to a record low on Monday. The Chinese developer is once again on the brink of insolvency, the CNN portal said. The company’s debts are around $ 300 billion.

Evergrande shares closed 20 percent. in the negative, reaching 1.81 Hong Kong dollars (0.23 US dollars). This is the lowest figure since going public in Hong Kong in 2009. Since the beginning of the year, the company has lost 87 percent. values.

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Long Evergrande

The firm, which has debts of around $ 300 billion, warned Friday that it may not have enough funds to pay off its financial obligations.

“In view of the current state of liquidity, there is no guarantee that the group will have sufficient funds to continue meeting its financial obligations,” Evergrande said in a statement at the end of Friday. The company “plans to actively engage” in the restructuring plan with creditors – added.

The government of Guangdong Province, where Evergrande is based, said it had called Evergrande President Xu Jiayin for a meeting on Friday night. In a statement, the government said it would send a working group to Evergrande at the company’s request to oversee risk management, strengthen internal controls and maintain normal operations.

Three Chinese regulators – banking, insurance and the securities regulator – said that any risk of the Evergrande situation adversely affecting the real estate market or homeowners was under control. Regulators also reiterated earlier accusations that the company was in trouble due to mismanagement and blind expansion.

Evergrande tries to raise cash to pay off the lenders, and the CEO has even sold off personal assets to support the company’s finances. So far, the company has avoided defaults and paid interest arrears before any grace periods expired, writes CNN.

Nevertheless, Friday’s announcement is a signal that the company may not be able to make further payments on time.

The Hong Kong Stock Exchange is in the red

The collapse of Evergrande and other real estate stocks affected Monday’s Hong Kong Hang Seng Index, down 1.8 percent. It was also influenced by heavy losses of Chinese tech stocks, the decline of which is a result of Didi’s sudden decision to leave Wall Street – just five months after going public, CNN reported.

The Hang Seng Tech index (30 largest technology companies) fell 3.3 percent. to the lowest level ever.

Main photo source: Shutterstock

About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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