China Evergrande Group said it has introduced a new repayment plan for disgruntled individual investors who have bought its wealth management products, as the real estate giant takes new steps to overcome a mountain of financial liabilities and late payments.
The conglomerate, which earlier this month sought government help to manage its debt crisis, said on Friday that one of its units had proposed to pay almost all holders of its wealth management products 8,000 yuan (equivalent to $1,255) per month from December to February.
The unit, known as Evergrande Wealth, said it will introduce another payment plan in March.
Evergrande, one of China’s largest developers, previously sold high-yield investment products to its employees and other individuals – often buyers of its properties – as part of a strategy to support its highly leveraged business model.
The company aggressively expanded through loans for years and used much of the money to acquire land and assets in areas far beyond residential real estate.
]The company had hoped that sales of expanding properties would generate cash to pay its debts, but it ran into trouble after Chinese authorities tightened developer loans and Evergrande apartment sales plummeted.
Reference: CNN Brasil
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