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Chinese Evergrande chairman Hui Ka Yan is refusing to be pressured to raise money by quickly selling the best-selling assets of debtors, just days after the group missed the deadline to pay off a bond that is expected to lead to infidelity.
The goods include land, urban rebuilding projects in the Pearl River Delta – a prosperous southern China region around Hong Kong – and the company. asset management, experts said.
“Hui wants to keep Evergrande’s most valuable assets as long as they can sell them at a good price, which will not happen because everyone knows they are worried,” said a person close to China’s finance ministry.
Evergrande, the world’s largest debtor, with more than $ 300bn in debt, missed the last day of Monday repaying $ 82.5m bond coupons. Although the bank had not yet transferred the money since Wednesday to New York, according to experts, neither the company nor the government has confirmed that it has failed to repay its debts.
Evergrande has also promoted a campaign to attract people government bank support in recent weeks to help prevent job losses.
The developer told homeowners and government officials in Wuhan and Nanning, two provincial cities where he had suspended operations, that he was in talks with credit bureaux, according to two people familiar with the company’s negotiations with government officials.
Evergrande did not respond to a request for comment.
On November 22, an Evergrande representative in Wuhan said the company had applied for business loans from government lenders to support its operations there, according to minutes of meetings the Financial Times observed.
“If our loan application is approved, we will consider paying the creditors if we complete the work in progress,” he said.
Evergrande is closer to infidelity this week than any other time of a marathon liquidity crisis which has spread to other businesses throughout the vast real estate sector.
The group said Friday that it is entering a re-planning with the help of officials sent by Guangdong province in southern China, where they live. On Monday, Hui said the group is forming a new risk management committee, with government officials with four of the seven seats.
In his letters Friday, Evergrande acknowledged that “there is no guarantee” they will have “enough money to continue doing what they want”, adding that it will “actively engage with debtors at sea” to formulate a restructuring plan.
Evergrande loan for several months has transformed global markets, where it has borrowed large sums of money. Bonders at sea complained in October a lack of engagement from the company.
Monday, People’s Bank of China, the country’s largest bank, released $ 188bn of liquidity in the economy to alleviate the stress arising from the Evergrande debt crisis.
Evergrande has about 800 projects across China, many of which are funded by prepaid subsidies.
Local governments have set aside housing and other resources to ensure that Evergrande’s activities in their area are completed and that contractors are paid on time.
The group’s main activity in the Chinese stock market it leads to political problems for officials tasked with overseeing the restructuring, emphasizing the urgent need for new funding.
In September, the group’s failure to pay for property transactions purchased by retailers sparked protests outside their Shenzhen headquarters.
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