Home ›› 26 Sep 2021 ›› Stock
Mingling with power brokers at celebrations to mark the centenary of the Chinese Communist Party on July 1, a beaming Hui Ka Yan showed no signs that his company, China Evergrande (3333.HK), was facing mounting pressure with debt repayments.
Hui, wearing a navy-blue suit and open-neck shirt, looked relaxed as he stood on a podium overlooking the festivities in Tiananmen Square, an invitation many considered a show of support for the billionaire businessman.
A month earlier, the Evergrande group chairman had hosted a rare meeting with more than 1,000 suppliers and was once again flanked by the business elite as he spoke of his deleveraging goals.
But now Hui’s highly leveraged business strategy is unravelling.
Evergrande missed a deadline this week to make an interest payment on a dollar bond, moving closer to a potential default.
Beijing’s tightening of the rules around debt and speculation in the property sector have tipped Evergrande into a liquidity crisis and with liabilities equivalent to around 1.97 trillion yuan ($302 billion) - roughly the size of Finland’s GDP - markets are on tenterhooks about contagion risk.
Evergrande and Hui did not respond to requests for comment.
In a September letter, Hui expressed appreciation for the hard work of employees and said Evergrande will deliver property projects as pledged, and fulfil responsibilities to property buyers, investors, partners and financial institutions.
