Will Evergrande’s Debt Bubble Burst? .. The shares fell to a new record

Evergrande shares plummeted to a new low recordon Monday as the Chinese developer once again swung on the back of a possible default.

Evergrande stock closed in drop of 20% to 1.81 Hong Kong dollars (0.23 dollars), the lowest level since it was listed in Hong Kong in 2009. After losing 87% of its value since the beginning of the year.

The company, which has a total liability of $ 300 billion, warned on Friday that it may not have enough funds to meet its financial obligations, as it faces a test immediate of your ability to repay creditors, today, Monday, after the expiration of a 30 day grace period on the payment of interest on your denominated bonds in dollars.

“In light of the current liquidity situation … there is no guarantee that the group will have sufficient funds to continue meeting its financial obligations,” Evergrande said on Friday. in a stock exchange announcement. He added: “We have in plans to actively participate “with external creditors in the restructuring plan, according to the” CNN “network, which was seen by” Al Arabiya.net”.

In turn, the provincial government of Guangdong, where Evergrande is based, said it had summoned Evergrande chairman Xu Jianye to a meeting on Friday evening. The government declared in a statement that will send a working group to Evergrande to oversee risk management, strengthen internal controls and maintain normal operations, at the company’s request.

Meanwhile, a series of seemingly coordinated statements from three Chinese regulators – the People’s Bank of China, the banking and insurance regulator and the securities supervisor – revealed that any indirect risk from Evergrande to the real estate market, homeowners and the broader financial system can be controlled. .

Regulators also repeated earlier allegations that the company had been in trouble due to a combination of mismanagement and blind expansion.

In the filing, Evergrande also said it has received a request from creditors to honor their commitment to secure payment of $ 260 million, adding that creditors can request an expedited payment if the company is not in able to meet their debt obligations.

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