Ailing Chinese real estate company Evergrande wants to pay investors with real estate in an emergency. A division of the company announced that this procedure had already started. Via the Wechat messaging service, the group said investors interested in returning asset management products for physical assets should contact their investment advisor or visit a local branch.
The sums at stake are high: according to the financial magazine Caixin, Evergrande has excellent asset management products estimated at 40 billion yuan, or around 5.3 billion euros. These products are generally held by individual investors.
Specific payment methods and details depend on local conditions, a customer service representative said. According to one proposal, which has not been confirmed by Evergrande, investors can choose between discounted apartments, offices, commercial spaces or parking spaces for reimbursement.
Late interest payments, then the price collapsed
China’s second-largest real estate developer is desperately trying to raise fresh funds so it can pay its many banks, suppliers and bondholders on time. He suffers from over $ 300 billion in debt.
On Saturday, the group also acknowledged mistakes made by some executives. They would have prematurely replaced the company’s investment products. The processes were very serious and the managers were asked to repay the funds received in advance.
Evergrande defaulted on bond interest payments in June. The subsequent downgrading of the credit rating by the rating agencies caused the stock price to collapse. Since the start of the year, the Group’s share price has fallen by three quarters. This Monday, the stock exchanges in China will be closed due to public holidays. The Chinese central bank and the financial regulator in August called on the management of Evergrande to deleverage and stabilize the group. Whether this can be successful remains to be seen. On Monday, angry investors stormed the hall of Evergrande’s headquarters in Shenzen and demanded their repayment.