2020年10月31日星期六
 
專家論市
Martin Hennecke

Evergrande cries foul as fake 'listing plea' goes viral
 
25/09/2020
 
China Evergrande (3333), which has 835.5 billion yuan (HK$948.17 billion) in debts, says it will take legal action against those who made up a fake company document claiming it is asking support from a Chinese official to approve its long-delayed A-share backdoor listing plan, because of surging default risk. Shares of China's No 2 property developer fell 5.58 percent to HK$15.22 yesterday, more than a four-month low. Mainland online media had posted a letter said to be written by Evergrande, in which it also warned the Guangdong government that it may fail to repay as much as 130 billion yuan due on January 31, equivalent to 92 percent of its cash and cash equivalents. That may lead to "cross defaults" in Evergrande's borrowings from banks, trusts, funds and the bond market, eventually leading to systematic risks for the broader financial system, the document stated. The letter, dated August 24, went viral on Chinese social media yesterday. Evergrande said last night that the documents and pictures are "fabricated and are pure defamation," and it will take all legal actions to protect its legitimate rights and interests. But it didn't address questions on whether it sought help from the government. Evergrande's total debt was 835.5 billion yuan at the end of June, rising about 4 percent from the end of 2019. Net debt swelled to a record 631 billion yuan on a weaker cash buffer. The average interest rate of borrowings rose 0.15 percentage points to 9.14 percent per year during the period. Evergrande in August reiterated an aggressive deleveraging target - cutting borrowings by about 150 billion yuan each year from 2020 to 2022, or about half its current debt load. So far it has fallen short on the pledge. It has since offered a 30 percent discount for home sales and reduced spending on land purchases. Evergrande also is aiming to raise up to US$2 billion (HK$15.6 billion) by spinning off its property management business to list in Hong Kong. In August, Evergrande sold 28.06 percent of its subsidiary Mangrove 3 for HK$23.5 billion to 14 key investors. Kimbee Chan Hoi-wan, executive director of Chinese Estates (0127) and wife of tycoon Joseph Lau Luen-hung, took a 5.37 percent stake. Chinese Estates also held 860 million shares in Evergrande, representing about 6.6 percent of the total issued share on June 30.

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