What about Evergrande
Chinese authorities reportedly asked billionaire Hui Ka Yan, owner of the struggling real estate giant Evergrande, to use his personal wealth to alleviate the growing debt crisis. of the company according to information from local media.
Beijing’s order to the founder of Evergrande would have come after his company missed the initial deadline of September 23 for the payment of the debt of a bond in dollars. China’s local governments would also be monitoring Evergrande’s bank accounts to ensure the company’s cash is used to complete unfinished housing projects and is not diverted to pay creditors.
The request adds to other signals from Beijing, which is reluctant to a government “bailout,” even as the real estate giant’s crisis spreads to other developers and affects the housing market.
It’s unclear whether Hui’s fortune is large and liquid enough to significantly affect Evergrande’s liabilities, which rose to more than $ 300 billion in June. Hui’s net worth has dropped to about $ 7.8 billion from $ 42 billion at its peak in 2017, according to estimates by the Bloomberg Billionaires Index.
Much of Hui’s known wealth derives from his majority stake in Evergrande and from the cash dividends he has received from the company since its listing in 2009 in Hong Kong. Hui has raked in about $ 8 billion over the past decade thanks to generous payments from Evergrande, according to Bloomberg calculations.
Last week, Evergrande surprised by pulling back from the brink of default and paying a $ 83.5 million coupon to international bondholders before they expired on October 23. Separately, Reuters reported that Hui agreed to put his own money into a bond-linked Chinese residential project to ensure that it is completed and the bondholders receive payment.
The next test will be the payment of a debt in dollars that expires on October 29, when a 30-day grace period ends. Later, maturities will arrive in 2022, with some US $ 7.4 billion of bonds on land and abroad.
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