Evergrande, the property giant in China on Monday (July 17) reported that it suffered a loss of USD 96 billion in the year 2021. It also reported USD 135 in liabilities. The company has released its long-delayed results.
The loss showed “the existence of material uncertainties that may cast significant doubt on the Group’s ability to continue as a going concern,” Evergrande said in a stock exchange filing.
Evergrande, once China’s largest real estate company, was found in 2021 to be drowning in more than USD 300 billion in liabilities. This has sparked a nationwide property crisis. The amount of money involved made the crisis capable of having global economic ramifications. Trading in Evergrande’s Hong Kong listed shares has been suspended since March 2022.
In the same month, Evergrande said that it won’t be able to publish its 2021 audited results within the timeframe required by Hong Kong’s listing rules. It blamed the delay on “a large number of additional audit procedures” and the Covid-19 pandemic.
Watch | China: Youth unemployment at record high, economy shows signs of weakness | All you need to know
On Monday, the company said that the net loss it suffered amounted to 686.22 billion yuan (USD 95.7 billion) in 2021. The latest filing in Hong Kong stock exchange may bring Evergrande close to a resumption of trading.
Is Evergrande still struggling?
On Monday, the company released unaudited results for the first half of 2022 as well. These showed that the group’s total liabilities had grown to 2.47 trillion yuan by June 2022. This is being considered a sign that Evergrande is still not completely out of troubled waters.
This year, Evergrande announced a long-awaited restructuring proposal. It offered creditors a choice to swap their debt into new notes issued by the company and equities in two subsidiaries, Evergrande Property Services Group and Evergrande New Energy Vehicle Group.
“The respective restructuring effective date is anticipated to be 1 October 2023 and the longstop date is 15 December 2023,” Evergrande said on Monday.
Property sector in turmoil
Property sector in China is still in turmoil. Major developers, including Evergrande, have been observed to be unable to complete housing projects. This has triggered protests and mortgage boycotts from homebuyers.
Evergrande has become symbolic of broader crisis in China’s property sector. This sector accounts for around quarter of the country’s gross domestic product.
Smaller firms have defaulted on loans or had problems raising cash since the government brought in stricter lending curbs in 2020.
In November, China’s banking regulator and central bank unveiled new measures to promote the “stable and healthy development” of the real estate industry.
They include credit support for indebted developers, financial support to ensure projects are completed and assistance for deferred-payment loans for homebuyers.
(With inputs from agencies)
You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.
For all the latest business News Click Here
