Shengjing Bank is one of Evergrande’s main creditors. According to a statement to the stock exchange, the bank requires that all net proceeds from the sale be used to settle Evergrande’s debt to it.
This suggests that Evergrande will not be able to use the funds for other purposes. It will probably again fail to meet its obligations to foreign creditors. However, analysts point out that the sale of the bank’s shares in fact constitutes financial assistance from the government.
Evergrande is due to repay $ 47.5 million to foreign bondholders by Wednesday, which is over one billion crowns. Last week, the company’s official deadline for paying interest of $ 83.5 million on foreign bonds expired. Evergrande’s total liabilities currently exceed $ 300 billion.
Evergrande has become one of the most problematic companies in China, staggering between a chaotic crash with far-reaching effects, a controlled collapse or a less likely prospect of rescue by Beijing. In addition, investors fear that the collapse of the company could severely affect the Chinese financial system and that the negative effects could spread to the rest of the world.
Evergrande squeezed the lending business. Poker players helped with their debts |
As part of the settlement of its receivables, Evergrande announced that it will sell Shenyang Shengjing Finance Investment Group 1.75 billion shares of Shengjing Bank, which represents 19.93 percent of the bank’s capital. Evergrande ‘s stake in the bank will fall to 14.75 percent after the sale. Shengyang Shengjing’s share, on the other hand, will rise to 20.79 percent and the company will become the bank’s largest shareholder.
However, Shengjing Bank is also one of the company’s largest creditors. According to a report by brokerage firm CCB International, Evergrande has borrowed seven billion yuan from Shengjing Bank. In addition, according to Reuters, Beijing is reportedly encouraging companies and state-sponsored developers to buy some Evergrande assets.
Evergrande, formerly known as Hengda Group, was founded in 1996 by billionaire and businessman Huai Khyen. He is also known as Xujiang. A small local company grew into a real estate giant, but mainly with the help of borrowed money.
According to the Evergrande Real Estate website, the company currently owns over 1,300 projects in more than 280 cities across China. Forbes magazine put Chuei’s personal assets at about $ 11 billion and ranked Evergrande among the world’s 500 largest companies, ranking 122nd.
The group is also engaged in activities other than the construction of real estate. Her business includes the production of electric cars, food and beverages, she also owns the media and a football club.
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