China: real estate giant Evergrande ordered to pay its astronomical debts
The Evergrande China Center, Hong Kong, August 25, 2021. REUTERS - TYRONE SIU
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3 min
Chinese real estate juggernaut Evergrande is being pushed by two creditors to repay debts immediately, Bloomberg News reported on Friday (September 3rd).
More pressure on this group, one of the largest private groups in China, which has embarked on an all-out diversification of its activities, from amusement parks to cars.
Evergrande had already admitted to fighting to keep his activities afloat.
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The amount of refunds claimed without delay was not specified by Bloomberg.
But the two trustees in action are among the main non-bank creditors of Evergrande.
But the promoter's debt is colossal: in June, it already reached 75 billion euros.
The 152nd world group, in terms of turnover according to the Fortune 500, itself indicated this week that it presented "
risks of default on loans
".
A concern already displayed by the rating agencies last month: Moody's giving it one of the worst possible ratings.
The concern is shared by the Chinese authorities.
Beijing has publicly urged the conglomerate to "
actively
"
resolve
its problems.
An unusual approach commensurate with the concern that the group's financial health arouses.
A possible liquidation would have considerable consequences.
Economic consequences, first of all, because Evergrande claims to employ 200,000 people and indirectly generate 3.8 million jobs.
Then there are social consequences
: some owners, who have already paid for their accommodation, may never benefit from it.
Real estate played a key role
in the
post-pandemic recovery
.
But Beijing, which fears overheating, has tightened the conditions of access to credit for developers.
Evergrande can no longer sell goods before having formally finished construction, in particular.
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