Evergrande Chairman Gives Pep Talk Despite Global Fears Over Default

By Rita Li
Rita Li
Rita Li
Rita Li is a reporter with The Epoch Times, focusing on China-related topics. She began writing for the Chinese-language edition in 2018.
September 21, 2021 Updated: September 22, 2021

The chairman of Evergrande Group showcased his faith in the company to get out of its “darkest moment” as soon as possible.

The company will fulfill its promise to deliver under-construction projects to home buyers, Chairman Hui Ka Yan said in a letter to employees on the day of China’s Mid-Autumn festival.

Evergrande announced on Saturday it had started repaying investors in its wealth management products with real estate.

Growing fears of Evergrande’s default rattled global markets on Monday with its Hong Kong-listed shares plummeting 10 percent, hitting HK$2.28 ($0.29) per share.

Its Hong Kong-listed shares have tumbled 84 percent so far this year.

“[Evergrande’s] stock will continue to fall, because there’s not yet a solution that appears to be helping the company to ease its liquidity stress,” said Kington Lin, managing director of Asset Management Department at Canfield Securities Ltd.

Lin said Evergrande’s shares could fall to below HK$1 if it is forced to sell most of its assets in a restructuring. Yet analysts expect a low recovery ratio for investors.

Late last month, Evergrande said some projects had been suspended due to deteriorating cash flow. Anxious home buyers recently flowed into the sales office on construction sites while hundreds of investors crowded into its headquarters seeking repayments.

Meanwhile, a major test is coming, as Evergrande is due to pay $83.5 million in interest relating to its March 2022 bond on Thursday.

The cash-strapped developer has another $47.5 million payment due on Sept. 29 for March 2024 notes.

Reuters contributed to this report.

Rita Li
Rita Li is a reporter with The Epoch Times, focusing on China-related topics. She began writing for the Chinese-language edition in 2018.