Evergrande's $300 billion liabilities can shake economies
Should that happen, the effects would be felt across China's banking system and the wider economy. The group has already suspended work on some projects as it tries to conserve cash, a move that's poised to hit China's property sector. Markets in the region shook on Tuesday. The Shanghai Composite (SHCOMP) closed down 1.4%, while Hong Kong's Hang Seng index (HSI) fell 1.2%.
Evergrande disclosed on Tuesday that it had made "no material progress" in its search for investors to buy part of its stakes in its electric vehicle and property services businesses.
The company also announced in a stock exchange filing in Hong Kong that it had enlisted financial advisers to "evaluate the liquidity of the group and explore all feasible solutions" as quickly as possible. But the company cautioned that nothing was guaranteed.
The disclosure came hours after Evergrande, which is one of China's largest real estate developers, had sought to reassure the public about its business. In a statement Monday night, the Shenzhen-based conglomerate addressed "recent comments" on the internet, saying that any bankruptcy rumors "are completely untrue."
But on Tuesday, Evergrande acknowledged its difficulty in finding buyers for its assets, saying that "it is uncertain as to whether the group will be able to consummate any such sale." ■