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Evergrande begins repaying wealth product investors with property

Stock MarketsSep 19, 2021 10:05
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© Reuters. FILE PHOTO: An exterior view of China Evergrande Centre in Hong Kong, China March 26, 2018. REUTERS/Bobby Yip/File Photo/File Photo

BEIJING (Reuters) -Cash-strapped developer China Evergrande Group has begun repaying investors in its wealth management products with real estate, a unit of its main Hengda Real Estate Group Co Ltd unit said.

Evergrande, with over $300 billion in liabilities, is in the throes of a liquidity crisis https://www.reuters.com/business/exclusive-china-evergrandes-lenders-weigh-up-loan-losses-rolling-over-credit-2021-09-17 that has left it racing to raise funds to pay its many lenders and suppliers. It has a bond interest payment of $83.5 million due on Thursday.

The company said in a WeChat post dated Saturday that investors interested in redeeming wealth management products for physical assets should contact their investment consultants or visit local offices.

Financial news outlet Caixin reported on Sunday that an estimated 40 billion yuan ($6 billion) in Evergrande wealth management products are outstanding. Such products are typically held by retail investors.

Specific payment methods and details are subject to local conditions, a customer service representative told Reuters on Sunday.

According to a proposal seen earlier by Reuters that Evergrande did not confirm, wealth management product investors can choose from discounted apartments, office, retail space or car parks for repayment.

Earlier this month, a stock exchange filing showed that Evergrande had repaid https://www.reuters.com/business/fitch-downgrades-china-evergrande-sees-probable-default-2021-09-08 219.5 million yuan in overdue debts due to supplier Skshu Paint Co Ltd in the form of apartments in three unfinished property projects.

On Sept. 10, Evergrande had vowed to repay https://www.reuters.com/article/china-evergrande-debt-idUSL1N2QC0Q9 all of its matured wealth management products as soon as possible.

($1 = 6.4655 Chinese yuan renminbi)

Evergrande begins repaying wealth product investors with property
 

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Comments (2)
Nick Smith
Nick Smith Sep 19, 2021 11:01
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ZenCat has hit the nail on the head and what happens when Evergrande has off loaded its dubious assets at a knock down price and is left with little or no material assets or credibility and still has a mountain of debt.Evergrande is only going one way, it just comes down to how long they can delay the inevitable.
Zen Cat
ZenCat Sep 19, 2021 5:55
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Many buildings remain unfinished.... unloading risk as conpensation on customers as a form of debt repayment? So if those discounted properties remain unfinished what happens to the buyers?
 
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