EverGrande Real-estate situation in China = Black Swan Event?
Will the EverGrande Real-estate situation in China be the catalyst that pops our real estate bubble and slow down our homebuilder industry?
This was last year, when they listed their stock to the HK market and scammed retail money. Now they are out of cash again, and their bonds are worth less than 30% on the dollar.
If this thing collapse, it could be China's version of the Lehman Collapse.
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The world’s most indebted developer has warned Chinese officials it faces a potential default that could roil the nation’s $50 trillion financial system unless regulators approve the company’s long-delayed stock exchange listing. Shares and bonds fell in volatile trading.
China Evergrande Group mapped out the scenario in an Aug. 24 letter to the Guangdong government seen by Bloomberg, in which the company sought support for a restructuring proposal needed to secure the listing and avert a cash crunch.
Some of Evergrande’s biggest strategic investors have the right to demand their money back if the company fails to win approval for a backdoor listing on the Shenzhen stock exchange by Jan. 31. If investors refuse to extend the deadline, Evergrande will need to repay as much as 130 billion yuan ($19 billion), equivalent to 92% of its cash and cash equivalents."
This was last year, when they listed their stock to the HK market and scammed retail money. Now they are out of cash again, and their bonds are worth less than 30% on the dollar.
If this thing collapse, it could be China's version of the Lehman Collapse.
"
The world’s most indebted developer has warned Chinese officials it faces a potential default that could roil the nation’s $50 trillion financial system unless regulators approve the company’s long-delayed stock exchange listing. Shares and bonds fell in volatile trading.
China Evergrande Group mapped out the scenario in an Aug. 24 letter to the Guangdong government seen by Bloomberg, in which the company sought support for a restructuring proposal needed to secure the listing and avert a cash crunch.
Some of Evergrande’s biggest strategic investors have the right to demand their money back if the company fails to win approval for a backdoor listing on the Shenzhen stock exchange by Jan. 31. If investors refuse to extend the deadline, Evergrande will need to repay as much as 130 billion yuan ($19 billion), equivalent to 92% of its cash and cash equivalents."
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