China housing giant admits debt crisis

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Dozens of anxious investors protested outside the headquarters of troubled Chinese property giant Evergrande on Sept 14, 2021. AFP

Dozens of anxious investors protested outside the headquarters of troubled Chinese property giant Evergrande on September 14, after the debt-laden firm conceded it was under “tremendous pressure” and may not be able to meet its repayments.

Evergrande’s plight has raised fears of a contagion across the debt-mired Chinese property sector – which accounts for more than a quarter of the world’s second-largest economy – with a knock-on for banks and investors.

The Hong Kong-listed developer is sinking under a mountain of liabilities totalling more than $300 billion after years of borrowing to fund rapid growth.

An estimated 60 to 70 people gathered outside Evergrande’s headquarters in the southern city of Shenzhen, demanding answers from the company, as police were deployed to maintain order.

Evergrande was downgraded by two credit rating agencies last week while its shares tumbled below their 2009 listing price, with a barrage of bad headlines and speculation of its imminent collapse on Chinese social media.

On September 13, the company insisted it will avoid bankruptcy.

But on September 14, it issued another statement to the Hong Kong stock exchange, saying it had hired financial advisers to explore “all feasible solutions” to ease its cash crunch.