Evergrande President Sells $1 Billion in Personal Assets to Help Business

the president of Evergrande, Xu Jiayin, has sold more than 7 billion yuan (US$1.1 billion) of personal assets to support his company amid the crisis it faces, state media reported chinese this week.

Xu sold several houses in Hong Kong, Guangzhou and Shenzhen, as well as some private jets, reported state media China Business News on Tuesday (16), citing unnamed sources linked to the matter.

The money, which Xu has pumped into Evergrande since early July, was used to “maintain the core operations of its massive business empire,” the newspaper reported, adding that the amount has been used to pay employee salaries and interest payments. on some bonds and money owed to investors in their equity product. The money was also used to complete real estate projects across China.

“Until now, Xu Jiayin has personally raised money to support Evergrande’s life,” the media wrote. The company did not immediately respond to a request for comment from CNN Business about the report.

The company’s shares rose up to 4.3% in Hong Kong this Wednesday morning (17), although in the afternoon they had reduced gains and rose 1.1%. In the year, the assets fell 80%.

Evergrande has been trying to divest assets to avoid bad debt while facing debt liabilities of more than $300 billion, but its efforts have met with mixed success.

In late September, the company announced it would sell a $1.5 billion stake in Shenyang-based Shengjing Bank to a state-owned asset management company.

But last month it canceled a plan to sell a majority stake in its property management unit for $2.6 billion to rival Hopson Development Holdings. Both companies said they could not agree on the terms of the deal.

Speculation about Xu’s role in keeping the company afloat has increased. Bloomberg, for example, reported late last month — citing unnamed sources — that Chinese officials told Xu to use his personal assets to pay off the company’s debts.

Presumably, Xu can’t do much. His personal wealth is valued at about $7.9 billion, according to the Bloomberg Billionaires Index — far less than the hundreds of billions of dollars Evergrande carries in debt.

So far, however, the company appears to have avoided defaulting on any of its publicly traded offshore bonds, paying accrued interest before the grace periods expired for each of those bonds.

She has another deadline approaching for late payment on a dollar-denominated bond. The 30-day grace period for this title expires on November 29, according to Eikon Refinitiv.

Broader debt concerns

Other Chinese developers also suffered as Evergrande’s debt problems continued, with its stocks and bonds falling and ratings agencies issuing further downgrades.

O real estate sector China has been suffering from a government campaign to curb excessive debt that began last year.

S&P Global Ratings on Tuesday downgraded the credit rating of China Aoyuan Group, a major Guangzhou-based developer.

The ratings agency said Aoyuan may not have enough cash to pay off debt and could face a liquidity crunch soon as its property sales have plummeted and its debt maturities are expected to accumulate in 2022.

The rating change followed similar moves by Fitch Ratings and Moody’s, which downgraded Aoyuan due to increased liquidity risks facing the company.

China Aoyuan shares, which are traded in Hong Kong, plunged more than 30% last month.

Fitch Ratings also further downgraded troubled homebuilder Kaisa Group’s credit rating to “C” from “CCC-“ as it believes the company has missed interest payments on several dollar-denominated bonds maturing earlier this month . Kaisa shares have been suspended from trading in Hong Kong since the beginning of this month.

Several other developers are also on the brink, with Shenzhen-based Fantasia Holdings and Beijing-based Modern Land having recently missed payments on bonds or loans.

*(Translated text. Click here to read the original, in English)