While economies are tumbling over and crashing down because of the havoc wreaked by the pandemic, the recent situation is witnessing the resurfacing of the Evergrande Group in news headlines. Before delving deeper into what has sparked this buzz about Evergrande, let us look at some pertinent facts about this business group which also happens to be the second-largest property in China according to the sales.
Being a high profile business group that had been declared to be the ‘most valuable real estate company’ globally in 2018, the Evergrande group has its headquarters in the Houhai Financial Centre in Shenzhen, Guangdong province of China.
Evergrande was founded in 1996 by Xu Jiayin and it had generated a revenue of more than 77 billion dollars in the last year. However, in 2021, the company had been in the grip of debt leading to a liquidity crisis. And it was since then that their stock prices have been declining, bringing the group to one of the focal points of media attention. Over the summer of 2021, the debts and financial problems of the Evergrande group kept accumulating instead of resolving, and reportedly they have had to face some dire consequences because of this. For instance, it was only last week when the Shanghai Trend zone Holdings Group Company had filed lawsuits against Evergrande for due of something around $37 million.
In the meanwhile, Evergrande is trying hard to recover from the monetary problems that they have unfortunately landed into.
Just like most other big shot companies, Evergrande has taken to selling their assets in an attempt to recover the debts. This has however also led to a fluctuation of their shares, worth and stakes. As per the facts and figures of the situation, Evergrande reportedly has a debt of a huge amount of over $300 billion. Now, if the pandemic has managed to incur such huge losses upon a business group that ranks 122nd on the list of Fortune Global 500, sit back and try to think about what kind of economic hell can it unleash on individuals, small businesses and national economies!
The recent news alarmingly states that Evergrande is now giving or rather selling away its complete share invested in the film and television streaming company named HengTen for an amount of $273 million.
It has also been noticed that on the previous Thursday, the Evergrande shares had fallen 5.7% while those of the Hengten rose by 25%. Evergrande is also presently having an overdue of about $148million and very interestingly this news of their deal with HengTen has been declared to the world just a day before Evergrande was supposed to pay the dues with interest. It is ironic to observe that only a few months back, in the first part of 2021, Evergrande had been the owner of a large chunk of the HengTen shares. Although the Evergrande had initially tried to avoid such big steps and gone for repaying dues within the last month of their grace periods, looks like this time they had no other option. That explains why they would sell such a large section of their stakes to a company that is considered to be the Netflix of China!
