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Chinese developer Evergrande's unit ordered to pay out $1.1 billion

Stock Markets Jul 31, 2022 10:45AM ET
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2/2 © Reuters. FILE PHOTO: The Evergrande Center of China Evergrande Group is seen amid other buildings in Shanghai, China, September 24, 2021. REUTERS/Aly Song 2/2

HONG KONG (Reuters) - Struggling developer China Evergrande Group said on Sunday that one of its subsidiaries, Evergrande Group (Nanchang) Co, Ltd, had been ordered to pay a guarantor 7.3 billion yuan ($1.08 billion) for failing to honour its debt obligations.

In July 2021, the guarantor, who was not named in the statement, provided a guarantee for the borrowings of certain entities controlled by Evergrande, the company said in a statement to the Hong Kong stock exchange.

Nanchang provided counter-guarantees in the form of a pledge of a total of 1.3 billion shares that it held in Shengjing Bank Co., Ltd.

"As the borrowers failed to repay the loans, the applicant carried out its obligations under the guarantee and claimed against the subsidiary under the pledge," Evergrande said in a statement.

The ruling "is that the guarantor has the priority to receive compensation from the sale of the shares" and the "scope covers the amount paid by the applicant (7.3 billion yuan)."

Evergrande has said it was selling its Hong Kong headquarters via tendering process, a source with direct knowledge told Reuters on Thursday. [L1N2Z90FQ]

($1 = 6.7433 Chinese yuan renminbi)

Chinese developer Evergrande's unit ordered to pay out $1.1 billion
 

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Comments (10)
George Jetson
George Jetson Jul 31, 2022 9:18PM ET
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made in Chiiiinneerr. garbage in, garbage out
Ramesh Shah
Ramesh Shah Jul 31, 2022 5:58PM ET
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Chinese real estate is overbuilt but home prices have to remain high for the wealth effect for the CCP leafers
GOTAMCHAND BOKDIA
GOTAMCHAND BOKDIA Jul 31, 2022 3:15PM ET
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it may be situation of emergency
GOTAMCHAND BOKDIA
GOTAMCHAND BOKDIA Jul 31, 2022 3:14PM ET
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it may be situation of emergency
GOTAMCHAND BOKDIA
GOTAMCHAND BOKDIA Jul 31, 2022 3:14PM ET
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it may be situation of emergency
Chris Vu
Chris Vu Jul 31, 2022 1:41PM ET
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This is the beginning of the collapse of China real estate bubble.
Edward Chong
Edward Chong Jul 31, 2022 1:41PM ET
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u can forget about this idea.
jason xx
jason xx Jul 31, 2022 1:27PM ET
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China government will have to bail them out.
Poor Standards
PoorStandards Jul 31, 2022 1:27PM ET
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I'd think so, but I'm also considering what would happen if they don't, and how to take advantage of that.
Nasir Uddin
Nasir Uddin Jul 31, 2022 1:25PM ET
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Black swan incoming
Tomek Mi
Tomek Mi Jul 31, 2022 1:25PM ET
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beautiful:)
Santosh Oak
Santosh Oak Jul 31, 2022 10:52AM ET
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This is a big sinking ship-- a Chinese Titanic? Or Lehman moment for China?
Random Snubben
Random Snubben Jul 31, 2022 10:32AM ET
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Black swan incoming?
nick cage
nick cage Jul 31, 2022 10:32AM ET
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To insulated to global markets. The fall of China is a boost
Random Snubben
Random Snubben Jul 31, 2022 10:32AM ET
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Not if mortgages cant be paid to other investera. Remember 2008?
nick cage
nick cage Jul 31, 2022 10:32AM ET
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It will definitely affect if China has to stimulate and pay off all the junk real estate they have. Only time will tell
Random Snubben
Random Snubben Jul 31, 2022 10:32AM ET
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Yeah, opening will be volatile
 
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