China tells Evergrande billionaire to pay off his company’s debt with his own money. However, it’ll be difficult to pay off $300 billion in debt with $7.8 billion in worth.
Chinese authorities reportedly told the billionaire behind insolvent China corporation, Evergrande, to pay off his company’s debt with his own money.
Chinese authorities have told billionaire Hui Ka Yan to use his personal wealth to alleviate China Evergrande Group’s deepening debt crisis, according to people familiar with the matter.
Beijing’s directive to the Evergrande founder came after his company missed an initial Sept 23 deadline for a coupon payment on a dollar bond, said the people, asking not to be identified discussing a private matter. Local governments across China are monitoring Evergrande’s bank accounts to ensure company cash is used to complete unfinished housing projects and not diverted to pay creditors, the people said.
The demand that Hui tap his own fortune to pay Evergrande’s debt adds to signs that Beijing is reluctant to orchestrate a government rescue, even as the property giant’s crisis spreads to other developers and sours sentiment in the real estate market. Chinese President Xi Jinping has been cracking down on the billionaire class as part of his “common prosperity” campaign to reduce the country’s yawning wealth gap.
It is unclear whether Hui’s fortune is big and liquid enough to make a sizeable dent in Evergrande’s liabilities, which swelled to more than US$300 billion as of June. The developer’s dollar bonds are trading at deep discounts to par value as investors brace for what could be one of China’s largest-ever debt restructurings.
Hui’s net worth has dwindled to about US$7.8 billion from US$42 billion at its peak in 2017, according to Bloomberg Billionaires Index estimates. But the figure comes with considerable uncertainty.
Zerohedge noted this as well.
*CHINA URGES EVERGRANDE FOUNDER TO PAY DEBT WITH PERSONAL WEALTH
All $300BN of it?
— zerohedge (@zerohedge) October 26, 2021
We’ve been reporting on Evergrande for months. The largest debt-ridden company in the world finally showed signs it could no longer pay off its debt a few months ago.
We noted that this is a real indication of the weakness in the Chinese economy.
BREAKING EXCLUSIVE: China’s Economic Crisis Has Arrived – This Will Impact the Entire World
Is China not helping Evergrande because they know they can’t address the entirety of their financial woes, so why help Evergrande?
The post China Tells Evergrande Billionaire to Pay off His Insolvent Company’s $300 Billion in Debt with His $8 Billion in Worth appeared first on The Gateway Pundit.
