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

Published 07/31/2022, 10:06 AM
Updated 07/31/2022, 10:45 AM
© Reuters. FILE PHOTO: The Evergrande Center of China Evergrande Group is seen amid other buildings in Shanghai, China, September 24, 2021. REUTERS/Aly Song

© Reuters. FILE PHOTO: The Evergrande Center of China Evergrande Group is seen amid other buildings in Shanghai, China, September 24, 2021. REUTERS/Aly Song

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)."

© Reuters. FILE PHOTO: The Evergrande Center of China Evergrande Group is seen amid other buildings in Shanghai, China, September 24, 2021. REUTERS/Aly Song

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)

Latest comments

made in Chiiiinneerr. garbage in, garbage out
Chinese real estate is overbuilt but home prices have to remain high for the wealth effect for the CCP leafers
it may be situation of emergency
it may be situation of emergency
it may be situation of emergency
This is the beginning of the collapse of China real estate bubble.
China government will have to bail them out.
I'd think so, but I'm also considering what would happen if they don't, and how to take advantage of that.
Black swan incoming
beautiful:)
This is a big sinking ship-- a Chinese Titanic? Or Lehman moment for China?
Black swan incoming?
Not if mortgages cant be paid to other investera. Remember 2008?
It will definitely affect if China has to stimulate and pay off all the junk real estate they have. Only time will tell
Yeah, opening will be volatile
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