The Evergrande tragedy does not bring happiness to a man who has been there recently

In March 2012, Andrew Left, a temporary U.S. retailer, received a secret package with no return address. Inside, a 68-page document exposes the false claims of a Chinese merchant who at the time was not known outside the domestic market.

The left-hand report of Evergrande Real Estate Group written in Hong Kong, which it says is “free of money” and “will be severely criticized in terms of financial status”, gave him $ 1.6m in profits after the share price fell, but a court case brought Woyang to court. The local market wasted a lot of damage.

“I was very impressed with this,” says Left, who was found to be spreading “fake or fraudulent” bans on the financial markets in the area. “I stopped counting the debt after $ 1m.”

This week, a Chinese company that came to offer big loans behind a major urban change in history it finally met with the challenges that the skeptics had predicted ten years earlier.

The name Evergrande on Monday appeared in the markets from New York to London as its growing crisis, which has been growing in China since July, began before global markets. Thursday is the last time to pay interest for one of his $ 20bn in US dollars. The payment had not been made as of Friday.

But with $ 300bn of the entire company, all the home loans are available to buy property at Build dormitories in hundreds of Chinese cities and sold them before they were finalized for a return, which has led to an estimate of the 2008 loss.

The future of the company, which many people expect they will want the biggest reform in Chinese history Whatever happens with interest rates, this week has been identified as an important test in the business sector, which has been long encouraged the nation’s economic growth but is now being pressured to reduce power after a change in government policy.

Billionaire playing on Poker

Evergrande was founded in 1996 by Hui Ka Yan, who work already in the steel industry, the year in which at least three Chinese people live in cities. The company, which was registered in Hong Kong in 2009 after initial testing, its shares rose 34 percent. By 2017, when the urban population of China had risen to 58%, Hui was the richest man in the country with a net worth of $ 45bn and was known to play with a Hong Kong multi-billion dollar club.

Like many major Chinese corporations, the company has taken large sums of money from the stock and bond market in Hong Kong, a major terrorist group to a global financial institution. Court approved Left realized that “Most market researchers in Hong Kong were bold about the prospect of Evergrande” in 2012. As recently as last month, about half of Hong Kong-based experts had a buy-in idea, which fell 84 percent this year.

Its growth in debt growth and border reserves, which last year was enough to hold millions of people, continuously raised eyebrows. But many believe the business was too big and necessary to rely on Beijing’s aid.

Hong Kong chief executive officer said investing in Chinese manufacturers – manufacturers of The largest chunk in the $ 400bn retail market in Asia – relies on “essential faith” that central or local governments will not allow “explosions”.

“If you believe the government will always support you, you will be in serious danger,” said the man, who barred his party from making money in Evergrande. “If you’re a wrestler for any reason for your bonus, it pays off every year.”

The whole confidence was shaken by the unveiling of a three-dimensional red line law in the summer of 2020, which reduced debtors after lowering interest rates. fear because of foam.

“I think one of the things that needs to be seen in the public eye is the radical change that the government has introduced in the real estate sector,” said Nish Popat, co-founder of the emerging markets in Neuberger Berman, who also recognized the idea outside China that the company was big. so much so that it could fail. “When we spoke to our Shanghai team,” he says, “they couldn’t believe it was the same.”

When other global currencies he was still buying Evergrande loan, Neuberger Berman in July walked out of the scene because he heard it was “difficult”. In the same month, it was reported that Rmb132m of its mainland subsidiary at a bank in Jiangsu province was eggs, while government officials in Shaoyang, Hebei Province, stopping construction work on his two works. All of these decisions were quickly reversed, and minor depending on the size of the company, but heartbreaking.

The Share Line (HK $) line chart shows Chinese stocks declining

Evergrande warned of immutable danger in August, just days after Beijing publicly criticized the order to reduce its debt, and criticized them for “false reports” on its involvement. Forced by three red lines, the company cut its debt from Rmb717bn late last year to Rmb572bn in June. But at the same time its debts rose to Rmb1.97tn, and at that time it was 10 of their 2012 returns.

Matters also came up with contracts from contractors over cases they did not receive, and the company was on its way to meet with file lawsuits in Chinese courts, although it still made a profit in the first half of the year. It sells its property in about half from June to August and expects a decline in sales in September, usually a busy month.

Although global markets this week have set up Evergrande loans, its assets have been attracted and revitalized due to unused housing from China construction.

Nigel Stevenson, a researcher at GMT Research, compiled a company report in 2016 with a low $ 0 per share after visiting 40 jobs in 16 cities. , and criticism of other treasures.

“The goods still need support, and it is clear that they are being paid 10 percent plus what is not sustainable in the long run,” he said. “Things have gotten to them.”

Global fund regulators have already benefited from higher yields on the Evergrande loan, at a time when the global stock market has been trading at exorbitant prices on Western economic sentiment.

The payroll agreement on Thursday offered an 8.25% coupon in 2017, and this week its price dropped to 24 cents per dollar. In a letter to customers last week, UBS, which held $ 300m of Evergrande bonds on various pages between April and July, said it was selling “below or below the same conditions”.

A coupon line chart of 8.75%, 2025 (% of the paragraph) shows the collapse of the China Evergrande bond

In anticipation of the renovation of the mountains, some retailers are scrutinizing the company’s assets outside of China which it found as it grew exponentially, including the share of the Hong Kong-based electric car company that still sells cars.

A group of foreign traders has hired Kirkland & Ellis law firm and investment bank Moelis & Co to advise on possible restructuring.

John Han, a lawyer for the US company Kobre & Kim, says he is in talks with a number of US freedom fighters who hold positions in the Evergrande bond. “The Chinese government will prioritize shareholders and buyers of foreign homes and banks more than Western debtors.”

S&P, which is expected to do so, does not expect the government to participate but hopes that Beijing will call for “systematic restructuring”. Within China, the future of Evergrande will be a far more complex and political test for President Xi Jinping based on ordinary citizens who have already paid for housing. The company has 778 jobs in 223 cities, and last week retailers went down to their headquarters in Shenzhen to ask for money.

Spillovers that appear on the global market are smaller than most Asian crops. But massive failures can instill confidence in the global economy, where global markets and local government markets rely heavily on them. Real estate sales plummeted by 90% year-on-year in early September, with new real estate sales declining sharply. Prices for new homes in 70 major cities are still rising year by year in August, however.

Andrew Left, who has never been to China and relies on the internet and the filtering companies to bet on the company, said he did not feel “good” when watching the news this week.

“I’ve never been in a situation where people thanked you and you didn’t get anything,” he said. “It has become a very important part of [my] my life has been a long time, and now it has become part of the economy. ”

The five-year ban expires next month but it still has one question: “Will the courts go after all the experts who put $ 40 on them?”

Additional reports by Edward White in Seoul and Tom Mitchell in Singapore

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