A major Chinese real estate company is in financial difficulty with a huge amount of interest-bearing debt exceeding 9 trillion yen in Japanese yen, and there is a growing sense of caution about its impact on the Chinese economy and financial markets in the future.
The Evergrande Group, which is the second largest real estate company in the real estate industry headquartered in Shenzhen, southern China, has actively invested in the development of condominiums and has also entered the electric vehicle business and the operation of professional soccer clubs. However, borrowing increased and interest-bearing debt swelled to over 9 trillion yen in Japanese yen.
Furthermore, since last year, the Chinese government has been wary of overheating of the real estate market and tightened regulations, which has worsened the profitability of the real estate business and has caused management difficulties.
Amid growing concerns about the company's cash flow, there has been some turmoil on the 13th of this month, with individual investors rushing to the headquarters to redeem the financial products sold by the group.
The Evergrande Group announced on the 13th of this month that "there is information on the internet that it will go bankrupt, but it is not true. However, we are facing unprecedented difficulties." We announced that there is a risk of defaulting on debt due to continued decline.
The company has a policy of urgently rebuilding by selling assets such as the electric vehicle business, but if management gets stuck, it is expected that the impact on the real estate market and the Chinese economy will be unavoidable.
In addition, as we issue huge dollar-denominated bonds worth 2 trillion yen in Japanese yen, there are concerns about the impact on financial markets, including overseas investors.