China Evergrande shares fall sharply after $2.6bn asset sale collapses
Source: The Guardian and agencies
China Evergrande shares fall sharply after $2.6bn asset sale collapses
‘No guarantee’ Chinese property giant can meet its $305bn debts, starting with a deadline on Monday that could trigger default
Martin Farrer and agencies
Thu 21 Oct 2021 09.58 BST
Shares in the struggling property giant China Evergrande have fallen sharply after plans to offload a stake in one of its units for $2.6bn fell through, casting further doubt over whether it can avert the country’s biggest ever corporate failure.
China Evergrande Group, the parent company for the sprawling empire built by former steel industry executive Xu Jiayin, closed down 12.54% in Hong Kong on Thursday.
Evergrande announced on Wednesday that it had formally abandoned plans to sell a 50.1% slice of Evergrande Property Services, one of its most profitable units, and said there was “no guarantee” it could meet its financial obligations in order to stay afloat.
The company, which is China’s second-biggest property developer with thousands of projects, has debts of $305bn.
But it is running out of cash thanks to a government crackdown on lending, and a slump in property sales and prices, sending shockwaves through the Chinese economy and global financial markets.
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Read more: https://www.theguardian.com/business/2021/oct/21/china-evergrande-shares-fall-sharply-after-26bn-asset-sale-falls-through