Xu Jiayin has been offering his personal assets to as guarantees on Evergrande debts
In today’s roundup of regional news headlines, China Evergrande dissolves several units of its Fangchebao online marketplace, the beleaguered developer’s chairman reportedly kicks in more than $1 billion of his personal fortune to boost liquidity, and banking analysts see Beijing’s crackdown on the real estate sector continuing into 2022 and beyond.
Evergrande Shuts Down Some Units of Online Marketplace
China Evergrande Group has dissolved several district-level units of Fangchebao, its online real estate and automobile marketplace, due to shrinking capital and business, Chinese media outlet Cailianshe reported on Wednesday, citing sources close to the embattled developer.
Fangchebao had planned for an initial public offering late this year or early next year. Evergrande in March sold 10 percent of the company to 17 investors for $2.1 billion, at a pre-financing valuation of over RMB 150 billion ($23.48 billion). Read more>>
Chairman Chips In $1.1B to Bail Out Evergrande
China Evergrande chairman Xu Jiayin has reportedly injected more than RMB 7 billion ($1.1 billion) in cash to boost the firm’s liquidity, as investor focus turns to efforts by another Chinese developer to delay upcoming payments.
China Business News cited unidentified sources close to Evergrande as saying Xu raised the funds from the disposal of personal assets and share pledges. That comes as his associate pledged two houses on The Peak in Hong Kong as collateral for a HK$821 million ($105 million) loan, which may help pay for overdue coupons on two bonds, according to Bloomberg Intelligence analysts led by Daniel Fan. Read more>>
China Property Crackdown Dragging Economy Back to 1990
China’s economy is slowing to the lows seen way back in 1990 — a price President Xi Jinping seems willing to pay to reduce its dependence on the property sector.
Beijing’s squeeze on the real estate sector will linger into next year and beyond, a development many hadn’t seen coming that has now prompted banks like Goldman Sachs, Nomura and Barclays to cut their growth forecasts in 2022 to below 5 percent. Read more>>
One of Asia’s Oldest Hedge Funds Buys Distressed China Debt
LIM Advisors, one of Asia’s oldest hedge funds, is picking up distressed bonds of Chinese developers as the Evergrande fallout deepens.
George Long, the firm’s founder and chief investment officer, said LIM has been snapping up a “little bit” of such debt but is staying away from the bonds of Evergrande because of its complex structure with both offshore and onshore securities and risks that can’t be gleaned from the balance sheet. Read more>>
Hong Kong Developers Ready Luxury Homes for Border Reopening
Hong Kong property developers are looking to release more expensive homes in the city’s The Peak and New Territories districts in anticipation of the reopening of the border with mainland China.
Wheelock Properties, for instance, expects to start taking reservations for private visits to four penthouses at Mount Nicholson, Asia’s priciest address, some time over the next few weeks. Read more>>
Chinese Developers’ Funding Lifeline Is Fraying
Chinese property developers sold a lot more homes than they built over the past few years — an “inventory lite” model that served them well for a while. Now worried local governments are paying much more attention. That could add to already severe strains on developers’ funding.
China’s housing market remains deep in the doldrums: new home sales last month fell 22.6 percent from a year earlier, worse than September’s 15.8 percent drop. New home prices fell 0.2 percent from a month earlier, the second consecutive decline. Read more>>
Mainland Homeowners Hire Haunted House Testers
It can be almost impossible to sell a property in Asia after it was home to an “unnatural death”, but a group of intrepid freelancers in China will make sure the place is not haunted — for a price.
They are typically paid RMB 1 per minute, and could make upwards of RMB 1,440 ($220) for a 24-hour stay, according to Dahe Daily, a news website based in the central province of Henan. Read more>>
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