Embattled Chinese real estate giant Evergrande sees debt soar to $340 billion
[Source]
China Evergrande Group, one of the country’s leading property developers stuck in a massive liquidity crisis, has reported seeing its debt rise to $340 billion at the end of 2022.
Background: Evergrande, whose headquarters have moved to Guangzhou, is currently the world’s most indebted property developer. The company alarmed markets in late 2021 after defaulting on its debts, which at the time was already at a colossal $300 billion.
Evergrande’s gargantuan debt resulted from years of borrowing, which saw its limit after Chinese regulators enforced debt control measures for major developers in 2020. To stay afloat, the company suspended housing projects and sold completed properties at discounted prices, but they were not enough to meet debt interest payments. Homeowners and investors who had major stakes in Evergrande all stood to lose — one woman made headlines after threatening to kill herself if she did not get her money back.
Current situation: In an overdue report Monday, Evergrande posted a total loss of $81 billion in 2021 and 2022. Meanwhile, its liabilities soared to $340 billion by the end of last year.
More from NextShark: People Who Panic Bought Food Are Allegedly Trying to Return It to Costco
Evergrande said its finances suggest “material uncertainties that may cast significant doubt” on its ability to continue. For now, the company is banking on its land reserves, which it believes will “provide solid support for the group to ensure the delivery of properties, gradual settlement of its debts and resumption of normal operations.”
The developer announced plans for restructuring around $20 billion in offshore debt in March. In a separate filing on Monday, it said it plans to convene meetings with creditors next week.
Meanwhile, Evergrande’s Hong Kong-listed shares remain suspended. Trading was halted in March last year, and the company risks being delisted if the suspension stretches for 18 months.
More from NextShark: Japanese man who spent $16K to become a ‘dog’ says he’s afraid others will think he’s ‘weird’
Enjoy this content? Read more from NextShark!
Wisconsin teacher accused of using anti-Asian slurs against student resigns
Rise of growth hormone use on children in China alarms health experts
