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24/11/2024
Sunday
THIS DAY IN HISTORY:
24 November 
1970 The United States and the USSR ratified the nuclear non-proliferation treaty.
1970 The Central Committee of CPSU restored the national autonomy of the Kalmyks, Karachais, Balkars, Chechens and Ingush.
1970 Charles Darwin published The Origin of Species - the first edition was sold out in a day.
24 November
1970 The United States and the USSR ratified the nuclear non-proliferation treaty.
1970 The Central Committee of CPSU restored the national autonomy of the Kalmyks, Karachais, Balkars, Chechens and Ingush.
1970 Charles Darwin published The Origin of Species - the first edition was sold out in a day.
Collapse of Chinese Evergrande Group threatens the world with economic disaster
The drop of securities of one of the most famous holdings of China may trigger the bankruptcy of China Evergrande Group. If this happens, the world markets may face a series of financial disasters. The holding, recognized in 2016 as the world's largest developer, can trigger a catastrophic development of events not only in the real estate market, but also in the social environment.
It is known that Evergrande had recently begun to actively get rid of the various assets. At the same time, the company's shares have lost more than 70% of their value since January 2021, having dropped to 4.22 Hong Kong dollars (about $ 0.54). The company is actively looking for ways to attract investments, while warning about the possibility of default on loan obligations.
Moody’s agency has also been pessimistic about Chinese construction companies over the last week. Representatives of the international rating agency noted a drop in sales and liquidity risks. The significant amount of debt that Evergrande has to pay off in the next six months or a year does not give grounds for positive forecasts. It will be very difficult to cover the existing debts, as the company had $ 13.4 billion of assets at the end of June.
The main beneficiary of the company is billionaire Xu Jiayin (known in Cantonese as Hoi Ka Yan). He owns almost 77.5% of the holding's shares, mainly registered with the Xin Xin firm (the offshore company was registered in the British Virgin Islands). The company's minority shareholders are also Jack Ma (the head of Alibaba) and Chinese Estates Holdings from Hong Kong.
It is known that Evergrande had recently begun to actively get rid of the various assets. At the same time, the company's shares have lost more than 70% of their value since January 2021, having dropped to 4.22 Hong Kong dollars (about $ 0.54). The company is actively looking for ways to attract investments, while warning about the possibility of default on loan obligations.
The amount of the holding's liabilities, according to Bloomberg, has already reached $ 305 billion (1.97 trillion yuan).
After several creditors demanded that the company urgently pay off the debts, the company's bonds began to plummet in value. This was also facilitated by the appearance of negative information from the national rating agency Chengxin. As a result, the Shanghai Stock Exchange was forced to urgently stop trading.Moody’s agency has also been pessimistic about Chinese construction companies over the last week. Representatives of the international rating agency noted a drop in sales and liquidity risks. The significant amount of debt that Evergrande has to pay off in the next six months or a year does not give grounds for positive forecasts. It will be very difficult to cover the existing debts, as the company had $ 13.4 billion of assets at the end of June.
Evergrande Group is the second largest developer in China.
Founded in 1996 and originally focused on the affordable housing, the company is located in Guangdong, southern China. In 2018, analysts recognized it as the most expensive real estate company in the world.The main beneficiary of the company is billionaire Xu Jiayin (known in Cantonese as Hoi Ka Yan). He owns almost 77.5% of the holding's shares, mainly registered with the Xin Xin firm (the offshore company was registered in the British Virgin Islands). The company's minority shareholders are also Jack Ma (the head of Alibaba) and Chinese Estates Holdings from Hong Kong.
08.09.2021
