China Tells Banks Evergrande Won’t Pay Interest Next Week

[Zeedox]

Doh. I just dropped a story on the restructuring in another thread.

 

[Zeedox]

Fixed!

Evergrande seeks US court nod for $32 billion debt overhaul as China economic fears mount

Embattled developer China Evergrande Group has filed for bankruptcy protection in a U.S. court as part of one of the world's biggest debt restructuring exercises, as anxiety grows over China's worsening property crisis and a weakening economy.

www.reuters.com

The developer has sought protection under Chapter 15 of the U.S. bankruptcy code, which shields non-U.S. companies that are undergoing restructurings from creditors that hope to sue them or tie up assets in the United States.

The filing is procedural in nature, but the world's most indebted property developer with more than $300 billion in liabilities has to do it as part of a restructuring process under U.S. law, two people familiar with the matter said.

 

[Zeedox]

I'm actually surprised at the other items they've invested in.

Evergrande is a massive company with more than 1,300 real estate projects in more than 280 cities, according to its website. The company also has several non-real estate businesses, including an electric vehicle business, a health care business, and a theme park business.

 

[Gomez Adams]

I was reading the article and when I hit back I got an error because the post was gone.

So I get here, see your reply to my post in this thread first, go to check the other thread to see your post, read the article, come back and that post is gone and it's right back where I started.

 

[Gomez Adams]

I'm actually surprised at the other items they've invested in.

It's the three largest up and down roller coaster industries you could ever get into. It's as if the board said, "what's the riskiest shit we can get involved with" and ran with it as a business strategy.

 

[Zeedox]

https://www.cbc.ca/news/business/evergrande-liquidation-property-developer-china-1.7097624

The decision was made by Hong Kong Justice Linda Chan, who said "enough is enough" after Evergrande had failed to offer efficient communications or resolutions over more than 18 months.

The company's shares were trading down as much as 20 per cent before the hearing. Trading was halted in China Evergrande and its listed subsidiaries after the verdict.

The liquidation ruling for the developer, which has $240 billion US of assets, will likely jolt already fragile Chinese capital and property markets.

 

[Gomez Adams]

That has been going on for a whole lot longer than I thought it would. It's not just Evergrande, either.

They took a page out of the American playbook and ran really big real estate Ponzi schemes and it's all been crashing down around their ears for the last couple of years now.

I honestly don't see how a liquidation really helps at this point. At best, it MIGHT get the Chinese Government back some of the billions it's been using to prop up the industry with, but that's about it. Their entire real estate industry is garbage now and will be for the foreseeable future.

To be fair, though, I don't think ours is very far behind them. All those investors buying up all those properties now under all that increased interest that they can't sell...

Tick, tock, tick, tock, tick, tock.