Global financial crisis fears as Chinese giant Evergrande unable to meet £196m repayment
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In a filing to the Hong Kong stock exchange today Evergrande warned: “In light of the current liquidity status of the Group, there is no guarantee that the Group will have sufficient funds to continue to perform its financial obligations.” It further warned that if it was unable to meet its obligations it may lead to other creditors demanding an acceleration of repayments. In response to the statement, the government of China’s Guangdong province have summoned Evergrande chai Hui Ka Yan. Reuter’s reports the Guangdong government will, at Evergrande’s request, send a working group to oversee the company’s management and operations.
Evergrande said it is currently assessing its overall financial condition and engaging with offshore creditors to try to create a viable restructuring plan.
Evergrande is thought to owe around $19bn (£14.07bn) to international investors.
One investor, Deutsche Markt Screening Agentur, previously told Express.co.uk they had not received payment on their bond by the end of its grace period and are pursuing a bankruptcy action against the company.
Once a powerhouse of China’s property boom Evergrande has now become the most indebted property company in the world with total debts of around $300bn (£226.93bn).
There have been major concerns the collapse of Evergrande could send shockwaves around global markets with US central bank the Federal Reserve warning the strain of China’s ailing property sector could pose problems for global growth.
Property accounts for nearly a third of China’s GDP however the sector has struggled in recent years due to a crackdown in Government regulation and a growing debt crisis amongst many companies.
More to follow…
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