#Evergrande defaults series

The crisis spread beyond Evergrande in 2021, however, and also affected such major property developers as Kaisa Group, Fantasia Holdings, Sunac, Sinic Holdings, and Modern Land.įollowing widespread online sharing of a letter in August 2021, in which Evergrande reportedly warned the Guangdong government that it was at risk of experiencing a cash crunch, shares in the company plunged, impacting global markets and leading to a significant slow-down of foreign investment in China during the period August to October 2021.Īfter rumours of financial difficulties surfaced in the summer of 2021, the company unsuccessfully attempted to sell assets to generate money. The 2020–2022 Chinese property sector crisis is a current financial crisis sparked by the difficulties of Evergrande Group and other Chinese property developers in the wake of new Chinese regulations on these companies' debt limits. CNN Sans ™ & © 2016 Cable News Network.Residential buildings developed by Evergrande in Yuanyang County, Henan. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC and/or its affiliates. Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN.

Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. US market indices are shown in real time, except for the DJIA, which is delayed by two minutes. Your CNN account Log in to your CNN account Analysts are worried that the government’s 5.5% annual growth target might be out of reach. Gross domestic product expanded 0.4% in the second quarter, the lowest growth rate since early in the pandemic.

#Evergrande defaults series

The development comes at a difficult time for China’s property sector, which has been struggling with a steep fall in home prices, weakening buyer demand, and a series of debt defaults by real estate firms.Ĭhina’s economy has also slowed dramatically after strict Covid lockdowns dampened demand and disrupted industrial activities. In June, it assured investors that it was on track to deliver the plan by the end of July. International creditors had complained earlier this year that they had been left completely in the dark about the companies intentions.Īfter creditors demanded updates and threatened to take legal actions, Evergrande pledged in January that it would release “a preliminary restructuring proposal” within six months. The lack of a concrete proposal highlights the uncertainties surrounding Evergrande’s opaque restructuring of its huge debt and sprawling business operations at a delicate time for China’s property sector and economy. Andrea Verdelli/Bloomberg/Getty ImagesĮvergrande's international creditors threaten legal action over 'opaque' restructuring process To contain the fallout, the Chinese government has intervened to take a leading role in guiding the company through a restructuring of its debt and sprawling business operations.Ī pedestrian walks past apartment buildings at China Evergrande Group's City Plaza development in Beijing, China, on Friday, Dec. It defaulted on its US dollar bonds in December after scrambling for months to raise cash to repay creditors, suppliers and investors. The real estate company’s failure to meet its self-imposed deadline comes at a time when China’s entire property sector is dealing with a growing mortgage boycott and slumping housing sales.Īccording to an exchange filing on Friday, Evergrande offered instead some details on ‘preliminary restructuring principles’ for its offshore debt, and said it aims to announce “a specific offshore restructuring plan within 2022.”Įvergrande, China’s most indebted developer with $300 billion in liabilities, has been at the heart of the country’s real estate troubles since last year. China’s embattled property giant Evergrande has failed to deliver a preliminary debt restructuring plan it had promised by July 31, leading to further concerns about the future of the world’s most indebted developer.