Jakarta, CNBC Indonesia – Government China President Xi Jinping’s leadership decided to gather a group of accounting and legal experts to examine the finances of Chinese property giant Evergrande Group. The company is currently making Bamboo Curtain uproar because it is threatened with defaulting on its debts and going bankrupt.
Quotes Al Jazeera Wednesday (15/9/2021)), regulators in Guangdong province are said to have sent a team from King & Wood Mallesons, a law firm whose specialty includes restructuring. In addition, at Beijing’s behest, they also sent additional financial advisors and accountants to assess developers.
This is the company’s latest move after asking Houlihan Lokey and Admiralty Harbor Capital’s services to “assess the group’s capital structure” and “achieve optimal solutions for all stakeholders”. Previously, the company said that the sale of its property assets was unable to pay off debts that were too large, US$ 300 billion, or around 4.275 trillion.
“It looks like they’re working on debt restructuring after there has been no tangible outcome on asset disposals, and the first task is to stabilize holders of wealth management products which could be a social problem,” said Daniel Fan, credit analyst at Bloomberg Intelligence.
“It appears that developers are working on rescheduling almost all domestic debt, and the next step is to do the same for overseas investors.”
The case of Evergrande’s failure to pay was revealed when the company was unable to fulfill its guarantee obligations for management products worth US$ 145 million or equivalent to Rp 2 trillion issued by a third party. This made investors start to worry and raid the company’s offices in the city of Shenzhen.
About 100 investors packed the lobby of the company building. More than 60 security personnel stood guard as the crowd shouted cursing at the company.
Even so, Evergrande continues to reassure its customers that they are currently making every effort to return the funds they hold.
“We are facing unprecedented difficulties, but we will do everything possible to continue the work and protect the legitimate rights and interests of customers.”
Meanwhile, the company’s shares fell 12% on the Hong Kong stock exchange on Tuesday. It extended this year’s decline to 80% and closed at its lowest level since November 2014.
This case has shaken the Chinese property market. Evergrande’s debt, which is one of the largest in the world, has sparked fears of the risk of contagion to the already affected property sector overhead and the banking system.
Evergrande’s long-standing loans to fund rapid growth plus the Xi Jinping government’s crackdown on industry are believed to trigger the crisis.
(boss / boss)
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