Evergrande has become the most visible face of the deep liquidity crisis that has been affecting China's real estate sector in recent years, an industry that represents a quarter of the second largest economy on the planet.
The company led the market until, starting in 2021, its serious financial problems began to come to light: a large debt that, like a snowball, grew until it led the company to liquidation, decreed this Monday by the Hong Kong court after turbulent months.
These are the main dates of that collapse.
August 2021, warning from the authorities
The construction of numerous Evergrande projects throughout China is being halted due to debt maturities.
Given this situation, the central bank and financial authorities convene the group's leaders, urging them to reduce debt risks and prioritize stability.
September 2021, default on payments and fall in the stock market
The clearest signs of financial problems for the most indebted real estate agency in the world are coming.
With a debt of 305,000 million dollars (more than 281,000 million euros), Evergrande fails to pay the interest on two bonds contracted abroad worth 131 million dollars (120 million euros), which have a period of 30 day grace.
The company's shares are in free fall on the Hong Kong Stock Exchange, where it is listed.
The real estate company warns about the risks of cross-default (that the non-payment of certain bonds triggers defaults in other financial instruments) due to the collapse in property sales.
October 2021, avoiding bankruptcy
Evergrande suspended the trading of its shares in Hong Kong on October 4 and resumed it on the 21st, although with a 10% drop in value.
The company, which had to repay between October and December 721 million dollars in dollar-denominated bonds and 436 million dollars in national bonds in yuan, avoids bankruptcy after depositing said payments at the last moment.
November 2021, Xu Jiayin reduces his stake
Xu Jiayin, founder of the company in 1996 and president of the firm, reduces his stake from 77% to 67.9% after selling 1.2 billion shares.
December 2021, insolvent
The Chinese brick giant is once again facing liquidity problems and does not meet its obligations.
The Fitch rating agency declares it insolvent after it officially failed to comply with the repayment previously agreed with its lenders in dollars, for the value of about 76 million euros.
Its shares fall to their lowest level since the conglomerate debuted in this market in 2009. The company announces that it will negotiate a restructuring plan with its creditors abroad.
March 2022, deposit confiscation
Evergrande suspends the trading of its shares again, citing the inability to present audited results.
In addition, an investigation is launched in the property management unit, where banks confiscate 13.4 billion yuan (1.722 million euros) in deposits.
January 2023, auditor resignation
PriceWaterhouseCoopers announces that it will not continue auditing the indebted real estate company, considering that it had not received sufficient information on some key matters to evaluate the company's accounts in 2021.
March 2023, restructuring
Evergrande presents a plan to restructure part of its offshore debt and proposes to the holders of this type of bonds new debt securities with the same value and “equity-linked instruments”, which can be converted into shares of its real estate management subsidiaries. or electric vehicles, both listed in Hong Kong.
July 2023, losses
Evergrande reports huge net losses: in 2021 they amounted to 476,035 million yuan (61,135 million euros) and, in 2022, they were 105,914 million yuan.
In 2020, the group had generated 8.076 billion yuan in profits.
August 2023, bankruptcy in the US
Evergrande is taking advantage of the suspension of payments law in the United States to avoid the seizure of its assets.
This law allows foreign firms that are in the process of restructuring to suspend payments on their international debts in the North American country.
The conglomerate announces losses of 33,012 million yuan (4,239 million euros) in the first half of the year, which represents 50.4% less than the same period of the previous year.
The company's shares are again trading in Hong Kong, after five months suspended.
However, they do so with losses of 79%.
Evergrande had already lost more than 90% of its stock market value when it suspended trading in its shares in March.
September 2023, arrests
The Shenzhen Police detain several employees of a financial subsidiary of Evergrande, Evergrande Financial Wealth Management.
Shortly thereafter, the conglomerate postpones its debt restructuring meetings, citing the need to reevaluate the terms of the proposal.
On September 25, Evergrande announces that it cannot meet the requirements for the issuance of new debt securities because its subsidiary Hengda Real Estate Group is being investigated by the China Securities Regulatory Commission for alleged illegal disclosure of information.
On September 28, trading on the Hong Kong stock market was suspended again, after it became known that the CEO and president of Evergrande was under investigation.
Xu has been under “residential surveillance” since then.
December 2023, opposition from creditors
The Hong Kong court approves the seventh extension for Evergrande to finish finalizing its restructuring plan.
Later, it becomes known that bondholders strongly oppose the company's revised terms.
January 2024, liquidation
Evergrande's electric vehicle subsidiary reveals on January 8 that its vice president, Liu Yongzhuo, has been detained and is under police investigation.
The group's creditors join the promoter's claim for liquidation.
After more than a year and a half of unsuccessful attempts to restructure its offshore debt, a Hong Kong court decrees the liquidation of the company on January 29.
Follow all the information on
Economy
and
Business
on
and
X
, or in our
weekly newsletter
Subscribe to continue reading
Read without limits
Keep reading
I am already a subscriber
_