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China asked Evergrande boss to pay off debt with own money: Report

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Evergrande reported that it has resumed work on more than 10 stalled projects.

Beijing:

According to media reports, Chinese authorities have asked Evergrande founder Xu Jian, once the country’s richest person, to use his personal wealth to ease the company’s debt crisis.

Liquidity crunch at one of China’s biggest property developers has dented investor sentiment and rattled the country’s crucial real estate market, raising fears of a possible transition to the broader economy.

Last week, the group unexpectedly paid interest on an offshore bond just ahead of its Saturday deadline, averting a default and giving it a much-needed relief.

Evergrande also reported that it has resumed work on more than 10 stalled projects.

But Bloomberg News reported Tuesday that Beijing has pushed Xu – also known as Hui Ka Yan in Cantonese – to help pay off some of the company’s debts, citing people familiar with the matter. For to dip into your pocket.

The report said that the directive from Beijing comes after his company defaulted on the initial bond interest payment due on September 23.

However, it is unlikely that Xu’s personal sacrifice will have much impact on Evergrande’s liabilities of more than $300 billion, with Bloomberg reporting his fortune at less than $8 billion.

Xu, 63, was once the richest man in China, worth more than $40 billion before Evergrande’s troubles began a few years ago.

People cited by Bloomberg also said that local governments across China are monitoring developer bank accounts to ensure the company’s cash is used to complete unfinished housing projects and pay creditors. is not diverted to.

The crackdown on China’s indebted real estate sector, which prompted Evergrande’s cash crunch, has also affected several other builders, including Cynic and Fantasia, who have failed to make loan payments.

On Wednesday rating agency Fitch downgraded another, Modern Land, after saying it failed to pay $250 million this week.

A major Chinese regulator in a statement on Tuesday also urged companies to complete their offshore bond payments.

Evergrande’s crisis comes at a time when Chinese President Xi Jinping rhetoric of his “shared prosperity” campaign designed to equalize wealth and strengthen oversight of domestic private giants.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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