2023-07-17 21:34:07
The giant Chinese real estate company, Evergrande, announced Monday a net loss of more than $ 113 billion in 2021 and 2022, and regarding $ 340 billion in debt.
Evergrande said in a report that the loss showed “the existence of material uncertainties that may cast doubt on the group’s ability to continue”.
It was revealed in 2021 that the company that was the largest in China in the real estate sector was drowning in more than $300 billion in debt, leading to a nationwide real estate crisis with global repercussions.
Trading in the company’s shares listed on the Hong Kong Stock Exchange has been suspended since March 2022.
Evergrande announced the same month that it would not be able to publish its 2021 audit results within the time frame required by Hong Kong listing rules, attributing the delay to a “large number of additional audit procedures” and the Covid-19 pandemic.
The company said Monday that it incurred a net loss of 686.22 billion yuan ($95.7 billion) in 2021 and 125.81 billion yuan in 2022, according to the results of its late review, which it sent to the Hong Kong Stock Exchange and might bring it closer to resuming trading.
In 2021, Evergrande announced that its total debt had risen to 1.97 trillion yuan and warned of default risks.
The unaudited results for 2022 showed that the group’s total liabilities had grown to 2.44 trillion yuan by December 2022, which means that it is still facing difficulties in repaying its debts despite selling a number of its subsidiaries.
Evergrande this year unveiled a long-awaited restructuring proposal that would offer creditors an option to swap their debt for new bonds issued by the company and equity in two of its subsidiaries.
“The start date of the restructuring is expected to be October 1, 2023, and the completion date is December 15, 2023,” it said Monday.
China’s real estate sector remains in turmoil, with major developers – including Evergrande – failing to complete housing projects, sparking protests and customers stopping their loan payments.
The company has become the embodiment of a broader crisis in China’s real estate sector, which accounts for regarding a quarter of GDP.
Meanwhile, small businesses have defaulted on their loans and others have had problems raising cash since the government imposed tighter limits on lending in 2020.
In November, the China Banking Regulatory Commission and the central bank unveiled new measures to promote the “stable and healthy development” of the real estate sector.
The measures include credit support for heavily indebted developers, financial support to ensure projects are completed and assistance with deferred payments of homebuyers’ loans.
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