Chinese govt summons Evergrande founder after warning on insufficient funds

evergrande, evergrande real estate group, evergrande group, Chinese government, china evergrande, Hong Kong exchange

The Chinese government summoned the embattled founder of real estate firm Evergrande on Friday, after the group issued a statement warning it might not have sufficient funds to continue to meet its financial obligations.

China Evergrande, which is drowning in a sea of debt worth $300 billion, has been struggling to meet its commitments and the firm’s woes have fanned concerns about the whole property sector, which makes up a substantial part of the world’s number two economy.

On Friday evening, Evergrande in a filing with the Hong Kong stock exchange warned that in light of its current liquidity situation, there is “no guarantee that the Group will have sufficient funds to continue to perform its financial obligations”.

In a follow-up statement hours later the provincial government in Guangdong said it had “immediately summoned (founder) Xu Jianyin and… agreed to send a working group to Evergrande Real Estate Group to supervise and promote enterprise risk management”.

The company is one of several real estate firms that have plunged into crisis over the past year after Beijing embarked on a regulatory drive to curb speculation and leverage, cutting off a crucial avenue for accessing cash.

Evergrande, which is China’s second-largest developer by volume, has so far managed to avoid default but challenges remain.

An Evergrande unit has bond coupons worth $82.5 million in total due on Monday, when the grace period ends, Bloomberg reported this week.

Last Friday, founder Xu — also known as Hui Ka Yan in Cantonese — sold 1.2 billion Evergrande shares for the equivalent of $344 million, cutting down his stake in the firm to 68 % from 77 %.

Beijing regulators have urged the tycoon to use his personal wealth to finance Evergrande’s debt struggles.

The same day, its auto unit said that it had returned undeveloped land worth some 1.2 billion yuan ($188.4 million), and is in active talks with buyers to potentially dispose of some assets.

– ‘Blind expansion’ – The property sector — a key growth engine in China — has cooled in recent months with stricter home buying rules and the liquidity crisis affecting some of the country’s largest developers.

“The risks of Evergrande Group are mainly due to its own poor management and blind expansion,” China’s central bank said in a statement Friday.

“The short-term risks of individual real estate companies will not affect liquidity in the medium and long-term market,” it added.

Another Chinese developer, Kaisa Group, is also facing default after saying Friday it had failed in a bid for a debt swap that would buy it crucial time.

Kaisa last month announced a plan to delay the repayment timeline for some of its bonds, offering an exchange for at least $380 million of notes, which would give it some room to find money further down the line.

But the offer failed to win the 95 % approval from bondholders needed for the plan to go ahead.

In a statement on Friday, the firm said it will explore solutions “including but not limited to renewal and extension of borrowings and disposing of assets”.

But “there is no guarantee” it would be able to meet its repayment obligations under the existing notes at maturity. It added that it has $400 million of dollar notes maturing on Tuesday.

Failing to repay the principal on the notes will be considered a default, and risks triggering cross default on its other debt.

With Chinese developers struggling to meet their debt obligations, Beijing has shown some signs of stepping back from its tough line on the mammoth property industry.

Last month, the southwestern city of Chengdu also announced measures to make it easier for companies to sell properties, making it the first to loosen restrictions on the embattled sector.

News Related

OTHER NEWS

FM likely to focus on growth, may announce steps for sovereign bond inclusion in global indices

Finance Minister Nirmala Sitharaman will present the highly-awaited Union Budget for FY2023 next week. The industry and market are eager to see how the government charts its course to come ... Read more »

Flipkart signs pact with FITT for joint research in social commerce

Representative image Walmart-owned Flipkart on Tuesday said it has inked an agreement with Foundation for Innovation and Technology Transfer to collaborate in the areas of social commerce, product recommendation to ... Read more »

Unilever to slash 1,500 jobs in major organisational restructuring

The proposed new organisation model will result in a reduction in senior management roles of around 15 percent and more junior management roles by 5 percent.The proposed new organisation model ... Read more »

‘Dexia Bank wants to flog off victims'

Other customers have also received much lower settlement proposals from Dexia Bank than they can claim on the basis of court rulings. PvdA MP Henk Nijboer will ask for clarification ... Read more »

Delhi HC proposes to reduce costs on Juhi Chawla from Rs 20L to Rs 2L in 5G lawsuit

The Delhi High Court Tuesday proposed to reduce from Rs 20 lakh to Rs 2 lakh the costs imposed on actress Juhi Chawla and two others by a single judge ... Read more »

Supply shortage rather than surplus demand is driving inflation, finds BlackRock report

Representative image: Shutterstock We have entered an era where supply constraints are the driving force of inflation rather than excess demand, a January 2022 report by BlackRock has determined. It ... Read more »

Unilever to cut 1,500 management jobs worldwide

Photo: ANP Food group Unilever is cutting approximately 1,500 management jobs worldwide. In an effort to simplify the organization, 15 percent of the positions for senior managers are disappearing. Unilever ... Read more »

Reevoy raises $4 million in seed round led by 9Unicorns, VCAT

The company had raised $1 million last year, in a pre-seed round. B2B cross-border trade startup Reevoy has raised $4 million in seed round led by 9Unicorns and VCAT. The ... Read more »

"A new beginning for me," says RPN Singh as he joins BJP after quitting Congress

Former Union minister and Congress leader RPN Singh joined Bharatiya Janata Party (BJP) in Delhi on January 25. (Image: ANI) Former Congress leader and Union Minister in United Progressive Alliance ... Read more »

Toyota to produce record 11 million cars in fiscal 2022 if chip supply stable

Toyota Motor Corp plans to produce record a 11 million cars in the fiscal year of 2022 as long as chip supplies are stable, the Nikkei newspaper reported on Tuesday. Read more »

Infosys partners Tennis Australia to drive new digital learning, accessibility initiatives

Infosys IT major Infosys on Tuesday announced a Corporate Social Responsibility (CSR) collaboration with Tennis Australia to drive new digital learning and accessibility initiatives for under-represented communities. This programme is ... Read more »

Hero Electric partners with ALT Mobility to deploy 10,000 Hero Nyx by 2023

Hero Electric on Tuesday said it has partnered with ALT Mobility, a dedicated platform for leasing of electric vehicles for the logistics market, to deploy its electric two-wheeler Hero Nyx. ... Read more »

Krispy Kreme announces dozen donuts giveaway for blood donors

Photo by: Krispy Kreme Press Release Krispy Kreme is helping in its own way to help tackle the blood shortage across the nation. The donut company announced on Monday, Jan. ... Read more »

CKPower to double renewable energy generating capacity in three years

CK Power Plc (CKP), one of the region’s largest producers of renewables-based electricity, has announced its plan to more than double its output in the next three years, reflecting the ... Read more »

Pidilite Q3 Results: Revenue comes in at Rs 2,581 crore, net profit at Rs 359 crore

Adhesives manufacturing firm Pidilite Industries Ltd on January 25 reported a revenue of Rs 2,580.7 crore for the quarter ending December 2021. The net profit, in the same period, was ... Read more »

Marmite maker Unilever cutting 1,500 jobs as part of massive shake-up

Image: Unilever's products include Domestos bleach and Dove soap to Marmite and Hellman's mayonnaise. Pic: AP Consumer goods giant Unilever has confirmed plans to cut 1,500 jobs under a shake-up ... Read more »

Unilever planning thousands of management job cuts: Bloomberg

Food to detergent group Unilever plans to cut thousands of management positions to speed up the decision making process, Bloomberg reported on Tuesday. Bloomberg quoted company sources who said ‘numerous ... Read more »

Hyundai Motor expects vehicle production to rebound in H1 as chip supply improves

Source: Reuters South Korea’s Hyundai Motor Co forecast on Tuesday its vehicle production would rebound in the first half of this year as a global chip shortage is expected to ... Read more »

Credit Suisse loses half a billion extra on legal issues

Photo: ANP Credit Suisse expects to spend an additional half a billion Swiss francs (483 million euros) on legal proceedings at its investment banking division. The financial group announced last ... Read more »

Exclusive: UP man claims Shopee selling fake products, cops issue FIR against the South East Asian firm

Controversies around Singapore-headquartered Shopee which entered India late last year refuses to die down. In a fresh development, the Uttar Pradesh police has filed a first information report (FIR) against four ... Read more »

Bhavish Aggarwal tweets Ola electric car design render a day after $200-million fund-raise

Ola CEO Bhavish Aggarwal on Tuesday tweeted an image hinting at the launch of the company’s electric car. The image came a day after its green vehicle subsidiary mopped up $200 million at ... Read more »

Little Ceasars launches new Gotham City's Batman-inspired pizza

Photo by: Little Ceasars Press Release Little Ceasars announces the arrival of a new food item, and it is both a calzone and pizza. The pizza chain launches the “Batman ... Read more »

Maruti Suzuki Q3 Results | Profit falls 48%, revenue stays flat at Rs 23,253 crore

India’s largest automobile manufacturer Maruti Suzuki India Limited on January 25 reported a consolidated profit after tax (PAT) of Rs 1,042 crore, for the third quarter ended December 2021, down 48 percent from Rs ... Read more »

China blue-chip stocks end at 15-month low ahead of Fed meeting, Lunar New Year

SHANGHAI- China shares ended at a 15-month low on Tuesday, dragged lower by weakened sentiment over concerns that the U.S. Federal Reserve would tighten policies and uncertainties in the markets ... Read more »

Earnings steady European shares after Monday's rout

European shares steadied on Tuesday following their worst sell-off since June 2020, catching up with a late recovery on Wall Street, while upbeat earnings from companies such as Ericsson and ... Read more »

McDonald's UK removes two items from the breakfast menu and customers are furious

Photo by: McDonald’s UK McDonald's U.K. made a bit of change in its breakfast menu lineup, but it disappointed many customers. This is because the fast-food chain has removed two ... Read more »

Royal Mail to cut 700 jobs after Christmas deliveries hit by Omicron disruption

The company says it is still working to improve some services locally after a COVID hit to staff availability in recent weeks but is satisfied it delivered a "solid performance" nonetheless. Read more »

Micro-loan securitisation volumes may see impact in Q4 due to third COVID-19 wave: Report

Representative image The securitisation volumes in microfinance loans, which saw improvement in the first nine months of FY22, may witness some impact in the fourth quarter due to concerns over ... Read more »

Punjab: Sacrilege attempt at Kali Devi Temple in Patiala, accused nabbed

(This story originally appeared in on Jan 24, 2022) PATIALA: In another sacrilege attempt case in Punjab, the police in Patiala have nabbed a 23-year-old accused for allegedly making an ... Read more »

Passenger capacity for Cathay Pacific forecast to remain at just 2% of pre-pandemic levels

A sign of Cathay Pacific is seen at its headquarters Cathay City in Hong Kong. (Reuters photo) HONG KONG: Beleaguered Hong Kong carrier Cathay Pacific's passenger capacity is forecast to ... Read more »

PM Modi calls for higher polling, discussion on 'one nation, one election'

Prime Minister Narendra Modi on Tuesday expressed concern over low voting percentage, especially in urban areas considered educated and prosperous, and said this should change in a vibrant democracy like ... Read more »

Republic Day: Delhi Metro launches train to commemorate ‘Azadi Ka Amrit Mahotsav'

The Delhi Metro Rail Corporation on Tuesday flagged off a specially decorated metro train as a part of the ongoing ‘Azadi Ka Amrit Mahotsav‘, a celebration of 75 years of ... Read more »

Job postings in Travel & Tourism sector sees 4% rise in December: Report

The travel and tourism industry, one of the hardest hit by the pandemic in the country, is on the path of recovery and registered a 4 per cent year-on-year growth ... Read more »

Oyo to submit revised draft prospectus for Rs 8,430 Cr IPO, amid broader market selloff

Softbank-backed Oyo is all set to file a revised draft document with the markets regulator SEBI as it moves ahead with its Rs 8,430-crore initial public offering, according to sources ... Read more »

Singapore says it's ready for 2022 travel demand when it returns

There are “encouraging signs of recovery” in Singapore's tourism sector, according to the Singapore Tourism Board. Visitor arrivals reached 330,000 and tourism receipts reached an estimated $1.9 billion Singapore dollars ... Read more »

Hyundai hopes chip shortage will decrease in second quarter

Photo: ANP South Korean automaker Hyundai is hopeful that the chip shortage affecting the global auto sector will ease in the second quarter. The company also expects sales to return ... Read more »

A third of mainland Chinese employees find their work hours ‘distressing', study by insurance giant AXA shows

Almost a third of workers in mainland China find the hours they work “distressing”, according to a global study of mental health and wellbeing by insurance giant AXA. At 31 ... Read more »

ESIC scheme adds 10.28 lakh new members in November

Around 10.28 lakh new members joined the ESIC-run social security scheme in November 2021 against 12.39 lakh in the previous month, official data showed on Tuesday, giving a perspective on ... Read more »

86% Indians want voting to be made compulsory: Survey

An overwhelming 86 per cent people want voting to be made mandatory in the country, according to a survey released on Tuesday on the occasion of the 12th National Voters’ ... Read more »

Sterlite Technologies share price rises on Rs 170-crore deal with Power Grid

Sterlite Technologies. (PC-PTI) Sterlite Technologies share price added over a percent in the afternoon trade at Rs 203 on the BSE after the company bagged a Rs 170-crore order for building ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic