Chinese authorities have a message for Hui Ka Yan, the founder of Evergrande: The buck stops with you.
Chinese authorities issued a directive for him to use his personal wealth to help pay off some of the sprawling property developer’s debt, Bloomberg reported. The order came after Evergrande missed a coupon payment for a dollar bond on Sept. 23.
Evergrande’s liabilities swelled to as much as $300 billion at the end of June. Hui wouldn’t be able to make much of a dent in that on his own, though, because his net worth stands at about $7.8 billion now, a fraction of the $42 billion he had four years ago.
Many people have wondered whether China would step in to resolve Evergrande’s debt crisis. The move to target Hui suggests the government is reluctant to directly get involved.
Evergrande faced almost certain default last week before making an $83.5 million coupon payment to international bondholders by Oct. 23. It’s not clear how the company managed to make the payment. Another dollar coupon payment was required by Oct. 29.
Even as Evergrande holds off default, more problems are on the way. A combined $7.4 billion of onshore and offshore bonds are coming due in 2022, according to Bloomberg.
At least 1.6 million buyers are waiting on the completion of Evergrande homes, for which they’ve already put down deposits. Its real estate sales tumbled 97 percent during this year’s peak buying season and prices in China’s wider housing market are down for the first time in six years.
Evergrande’s problems have spread beyond China. Some of China’s most active developers in the U.S. are being flagged as risks, including Oceanwide Holdings, China Vanke and Greenland.
[Bloomberg] — Holden Walter-Warner