China’s second-largest real estate developer by sales, Evergrande, admitted this week it is under “tremendous pressure” and may not be able to meet its crippling debt obligations.
The company’s share price has plunged nearly 80% so far this year, with trading of its bonds repeatedly halted by Chinese stock exchanges in recent weeks
The firm has been downgraded by rating agencies Fitch and Moody’s.”We view a default of some kind as probable,” said Fitch.
Meanwhile, some 1.5 million people have put deposits on new homes that have yet to be built.
On Tuesday, Evergrande said in a statement to the Hong Kong Stock Exchange that it had hired financial advisers to explore “all feasible solutions” to ease its cash crunch. The statement warned that there was no guarantee the company would meet its financial obligations. On Monday, the Shanghai Stock Exchange paused trading in Evergrande’s May 2023 bond after it dropped more than 30%. (RT)
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