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Protesters gathered for a third day in a row at the offices of faltering developer Evergrande, after a corporate offer of real estate and parking spaces instead of cash refunds angered already upset investors.
The struggling real estate titan has warned he may not be able to repay his colossal debts of more than $ 300 billion, causing panic among property buyers, bondholders and entrepreneurs, and stoking fears of a default that could spill over into the world’s second-largest economy.
Experts say the Hong Kong-listed developer has over a million prepaid units that have yet to be built, adding to the sense of apprehension among Chinese investors, many of whom are first-time buyers trying to gain a foothold on the runaway Chinese property. Marlet.
The company admitted on Tuesday that it was under “enormous pressure” and that it might not be able to meet its commitments.
About 60 protesters returned to Shenzhen headquarters on Wednesday, and more are expected later today to claim their money from a private company, whose rapid expansion into 280 Chinese cities once bolstered its reputation.
They briefly circled a man who appeared to be a representative of the company and chanted “Evergrande, give us our money back”.
They were greeted by a heavy police presence but refused to disperse, especially after an apparent effort by Evergrande overnight to pay off debts with pledges of property, parking spaces and soured shops. ‘atmosphere.
“They gave us shops, kindergartens and parking lots … but we can’t use them. None of us agree with that,” said a woman who gave her name. family only under the name of Wang and whose financial company in Chongqing “does not really work”. “due to unpaid debts of the promoter.
“They are trying to manage their bad properties,” another investor told AFP, on condition of anonymity.
“(But) these are products they can’t sell.”
On Wednesday morning, a woman was sitting on the floor outside the offices crying, while several police officers stood guard nearby and chased journalists away.
Desperation is growing among unpaid vendors – some of whom in Shenzhen say they owe more than $ 1 million – as well as investors, who rely on the returns to pay off their own loans and staff salaries.
The giant mountain of debt contributed to Evergrande’s voracious expansion, which began throughout the ’90s real estate boom until Beijing decided to reduce leveraged growth by introducing “three red lines.” in 2020.
But while there are dire warnings about the impact an Evergrande default would have on the economy, experts say a disorderly implosion shouldn’t happen because Beijing would likely step in.
“An Evergrande default could hurt consumer confidence if it were to affect household deposits for homes that are not yet completed, but we assume the government would act to protect household interests, making this unlikely outcome, ”the rating agency Fitch said in a statement. a note Wednesday.
Markets from Hong Kong to New York have so far taken Evergrande’s woes in stride, despite months of bad news about the company, including two downgrades and gloomy statements from the company.
bys / apj / dan
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