Real estate group Zitterpartie for Evergrande payments goes into the next round

Real estate group Zitterpartie for Evergrande payments goes into the next round

Real estate group Zitterpartie for Evergrande payments goes into the next round

The struggling real estate group China is gaining some breathing space with a share sale in the People’s Republic, but is still causing fear among foreign investors. The group plans to sell its stake in Shengjing Bank for 9.99 billion yuan (around 1.3 billion euros) to a state-owned asset company.

Evergrande announced this on Wednesday. The proceeds are to be used to pay off debts Evergrande has with the bank. Evergrande did not comment publicly on an interest payment of $ 47.5 million on a foreign bond due on Wednesday. Some creditors have not received any money by close of business in Asia, according to insiders. Nor would they have heard from Evergrande about the distribution.

The company itself did not provide any response. Last week Evergrande let a similar payment deadline for $ 83.5 million pass without comment. Foreign investors had little hope this time either.

The real estate giant’s silence on its international payment obligations raises suspicions of unequal treatment of domestic and foreign creditors. After all, the simultaneous sale of shares in China within China is less about supporting Evergrande itself than about ensuring that Shengjing Bank, one of the largest domestic lenders, is still seeing some of its money. The bank demands that the Evergrande Group must use all net proceeds from the sale of its Shengjing shares to settle debts with the bank. Last week, Evergrande reached an agreement on a yuan bond shortly before the payment deadline for a dollar bond expired.

The group, once the epitome of the Chinese construction boom, is in the chalk with customers, banks and investors with more than 300 billion dollars. Investors have recently been hoping for government aid. The Chinese central bank signaled support for private Evergrande investors. According to observers, the latest deal with the state asset manager signals how the Beijing leadership wants to prevent an uncontrolled collapse of the real estate giant with the help of its own companies.

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200,000 people work at Evergrande, and several million workers are hired for construction projects every year. In addition, many small investors have invested money in Evergrande financial products. Some of them had stormed the company’s headquarters a few days ago and asked for their money back. Many expressed their anger at Evergrande on the WeChat messenger service, where protests were organized in special groups.

On Wednesday, users said that the function of at least eight such groups with 200 to 500 members each was restricted. According to this, some users have not been able to post messages to the groups since Tuesday morning. Others reported that they could not open the chat or that the groups had been deleted entirely in their WeChat app. WeChat owner Tencent did not want to comment on the events, and no comments were received from the Internet regulatory authority or the Ministry of Public Security.

Evergrande, the $ 300 billion indebted real estate company, is on the brink of abyss. The possible bankruptcy is still primarily a domestic Chinese problem.