China’s Evergrande debt crisis
HONG KONG, Sept. 14 (Reuters) – China’s most indebted real estate developer Evergrande Group (3333.HK) struggles to resolve its debt crisis, as more and more signs point to policymakers intervening to avoid a hard landing for a business deemed too big to fail. Read more
Here’s a timeline of events leading up to their debt problems and what the company has done to raise money so far:
Evergrande commits to reducing its debt for the first time, aiming to reduce the net debt ratio to 70% by June 2020, from 240% in June 2017.
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The central bank names Evergrande in a report as one of the few financial conglomerates under its watch that it says could lead to systemic risk.
Evergrande aims to reduce its debt by 150 billion yuan ($ 23.3 billion) per year for three years.
Regulators are meeting with 12 major real estate developers, including Evergrande, in Beijing to introduce caps for three different debt ratios in a pilot program dubbed “the three red lines.”
Evergrande sells 28% of its property management unit for $ 3 billion in a pre-IPO deal.
He commits in a letter to the Guangdong provincial government to approve a backdoor listing plan in Shenzhen that has dragged on for four years, warning that it would face a cash shortage that could lead to systemic risks.
The company offers a 30% discount on properties for a month to boost sales.
He raises $ 555 million in a lean secondary stock sale in Hong Kong.
He ends the Shenzhen backdoor listing plan and makes a deal with some strategic investors not to demand redemption.
Evergrande Property Services Group (6666.HK) IPO in Hong Kong raises $ 1.8 billion.
China Evergrande New Energy Vehicle (0708.HK) electric vehicle unit raises $ 3.4 billion by attracting six new investors.
Evergrande sells 10% of its online real estate and auto market Fangchebao to 17 investors for $ 2.10 billion in a pre-IPO deal.
It aims to reach the three ceilings on debt ratios by the end of 2022, and establishes a plan to register Fangchebao by the beginning of next year and create other units, including spring water. and tourism.
Evergrande has announced that it will sell more than half of its 58% stake in its smaller counterpart Calxon (000918.SZ), worth $ 386 million.
Fitch downgrades Evergrande to “B” from “B +” with a negative outlook.
The developer is arranging HK $ 13.6 billion ($ 1.75 billion) to pay off a maturing bond and interest on all other dollar bonds, and he says he will have no more bonds due. deadline before next March.
Evergrande hits one of the debt ratio ceilings set by regulators, reducing its interest-bearing debt to about 570 billion yuan, from 716.5 billion yuan six months ago.
A court orders the freezing of a bank deposit of 132 million yuan held by Evergrande at the request of China Guangfa Bank Co (GDDVB.UL). Evergrande says the loan is not due until next March and that he plans to take legal action.
Some Hong Kong banks are refusing to grant new loans to buyers of two of Evergrande’s unfinished residential projects.
Evergrande abandons a special dividend proposal. S&P downgrades its ratings on the company two notches to B- from B + with a negative outlook.
Fitch downgrades Evergrande to “CCC +” from “B”.
Evergrande agrees to sell stakes in its Internet unit HengTen Networks Group Ltd (0136.HK) for a total of HK $ 3.25 billion.
Moody’s downgrades Evergrande’s Family of Companies (CFR) rating by two notches to “Caa1” instead of “B2”.
Legal sources say the lawsuits against Evergrande across the country will be handled centrally by the Guangzhou Intermediate People’s Court.
S&P downgrades Evergrande again two notches to “CCC” instead of “B-”.
The company says it is in talks to sell some assets, including stakes in Evergrande New Energy Vehicle and Evergrande Property Services.
State media report that construction has been halted on two Evergrande projects in Kunming, one for late payments and the other due to be delivered to homebuyers in October.
Hui Ka Yan is stepping down as chairman of the flagship unit Hengda Real Estate Group, which Evergrande says is due to the end of the backdoor listing plan.
China’s central bank and banking watchdog summon top Evergrande executives and issue rare warning that the company needs to reduce debt risks and prioritize stability.
Evergrande is committed to doing everything possible to resolve its debt problems and will strive to maintain the stability of the real estate market.
Evergrande warns of liquidity and default risks if it does not resume construction, divest more assets and renew loans, as it signals a 29% year-on-year decline in its net profit, including non-controlling interests, to 10.5 billion yuan.
President Hui Ka Yan, along with the heads of eight task forces set up to guarantee door-to-door deliveries, led a pledge signing ceremony to promise buyers that they would complete construction on their homes.
China Chengxin International Credit Rating Co (CCXI) downgrades Evergrande and its onshore bonds to “AA” instead of “AAA”, thereby erasing the value of the bonds for use in pledged repo transactions.
Moody’s downgrades China Evergrande’s Family of Companies (CFR) rating to “Ca” from “Caa1”, with a negative outlook.
Fitch downgrades Evergrande to “CC” from “CCC +”, signaling a “probable” fault.
Evergrande is asking for an extension of interest payments on trust loans to creditors, including CITIC Trust.
Media reports that Evergrande will suspend interest payments owed on loans to two banks later in September, as well as payments on its wealth management products.
President Hui engages in a forum to repay all of his mature wealth management products as soon as possible.
Angry investors storm the lobby of Evergrande’s headquarters in Shenzhen to demand repayment of loans and financial products.
Some videos circulating on Chinese social media show what is described as Evergrande-related protests elsewhere in China.
Evergrande said online speculation about her bankruptcy and restructuring was “totally bogus”, but adding that she was facing “unprecedented difficulties”.
Evergrande said it hired financial advisers to review its financial options and warned of the risks of cross-default in the fall in real estate sales.
($ 1 = 6.4451 Chinese yuan)
($ 1 = 7.7794 Hong Kong dollars)