PUBLICIDAD

Marruecos

Chinese company Evergrande becomes target of protests again

Hundreds of investors have gathered outside the company's headquarters in Guangzhou to demand the return of their money after the fall of its shares and the debts it faces
REUTERS/ALY SONG

REUTERS/ALY SONG  -   China Evergrande Group Headquarters in Shenzhen, China

A hundred people have gathered outside the headquarters of the company Evergrande in the city of Guangzhou in protest. The protesters are asking the brand to return the money they have invested, something the company has not yet been able to solve and investors are fearing what might happen. Official media in the Asian country witnessed the strike in which people were heard shouting for their money back. The online newspaper Reuters has been given access to the investors' testimonies, in which one of them said that "we are afraid that we will be sacrificed". 

They are beginning to fear the consequences of having invested in the company. The brand announced earlier this year that it would start making monthly repayments of 8,000 yuan, but investors do not trust its words and believe that their money will be used by the company to pay off its debt. Although they are trying to amortise the payments, it is also worth noting that they are asking for a six-month delay as they are finding it difficult to repay the more than $300 billion they owe.  

The property giant, which has been in debt for quite some time, slightly resumed trading on the Hong Kong Stock Exchange where it managed to push its shares up 10 % following its cancellation of trading on Monday. According to data provided by MarketWatch and accessed by the RT newspaper, the Chinese brand's share price was 1.75%, although it later fell to 1.61 dollars. That day, the authorities in Hainan province ordered the demolition in 10 days of some 39 buildings constructed by the brand in an irregular manner and with illegal permits. Even so, Evergrande asked to re-list, assuring that the news would not affect the rest of its projects, such as the one it is carrying out on a Chinese island called Ocean Flower Island. 

"Regarding the current liquidity situation, the company will continue to actively maintain communication with its creditors, strive to resolve risks and protect the legitimate rights and interests of all parties," the real estate company said in a statement. Evergrande further stressed that in 2021 its sales grossed 433bn yuan, down 39% compared to 2020

china evergrande
AFP/PETER PARKS - Global stocks plunged on 20 September 2021 as stock markets were gripped by fears of contagion from the expected collapse of debt-ridden Chinese property giant Evergrande, while rising energy costs and a showdown over the US debt ceiling also put investors on red alert.

Evergrande is a Chinese company founded in 1996 by entrepreneur Xu Jiayin and is part of the Global 500, a ranking of the world's top-earning brands. In addition to the real estate sector, the company is also active in food, vehicles, life insurance, audiovisual resources, theme parks, technology and entertainment,  

It is China's second largest property developer, and its shares account for 2% of the nation's GDP. But it is now facing a serious liquidity problem, which has left the brand millions in debt to creditors and investors. Its debts have been accumulating along the way and the problems with investors have been growing as it fails to raise money faster.  

Since news of the company's problems became known, many of its workers and people who had bet firmly on the company are fearing its total bankruptcy. Added to this is the fact that if it were possible for its system to plummet, experts say that many more brands could go after it because of Evergrande's importance in the country in economic terms.  

Fearing "a domino effect", which would affect the whole country, analysts and experts trust in the intervention of the Chinese government in the matter, although they also assure that the company is in a process of restructuring and the directive of the Chinese nation, in any case of intervening, would do it to show its determination with respect to the new regulation of the real estate sector that is being carried out, since the debt that Evergrande sustains is not big enough either.