:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/elcomercio/DFR4SKPNVNAQZDWZWGAD4FNUDI.jpg)
One of its units – Evergrande Property Services – said some of its lenders unexpectedly demanded about 13.4 billion yuan ($2.1 billion) of its bank deposits pledged as security for “third-party guarantees”.
She did not specify who the lenders were, saying only that the banks had controlled the cash. The Real Estate Services Unit said it would form an independent commission to investigate.
The real estate developer is one of China’s largest and most heavily indebted companies with more than $300 billion in total liabilities, including about $19 billion in outstanding offshore bonds held by international asset managers and private banks on behalf of their clients.
Credit rating agency Fitch announced that Evergrande defaulted in December — a downgrade that the ratings agency said reflected the company’s inability to pay interest on dollar-denominated bonds.
In 2020, Beijing began cracking down on excessive borrowing by developers in an effort to rein in their rising clout and curb unruly home prices. But the sector’s problems escalated dramatically last fall when Evergrande began urgently warning markets about liquidity problems.
But the patience of some of the company’s international creditors is running out.
In January, a group of overseas bondholders threatened legal action over an “opaque” debt restructuring process. They said they would “seriously consider enforcement action” after Evergrande failed to engage them significantly about reorganizing its operations.
Evergrande has another interest payment due on Wednesday.
The company said in its stock exchange filing that “the audit work is not yet complete”, and that “dramatic changes” in the operating environment and the Covid-19 pandemic have led to delays in preparing its earnings. It said it would publish it “as soon as practicable” after the audit is completed.
Other major developers are also having trouble meeting the March 31 earnings deadline.
“Organizer. Pop culture aficionado. Avid zombie scholar. Travel expert. Freelance web guru.”
More Stories
Dow futures drop: Market rally reaches major test; Tesla Rival On Tap
High oil prices help Saudi Aramco earn $88 billion in the first half
Anshu Jin, CEO of Cantor and former co-CEO of Deutsche Bank dies