In a letter, the Guangzhou housing regulator demanded that Evergrande transfer the presale proceeds of a closed-down construction project to an account under government supervision. In Zhuhai, next to Macau, a local housing agency ordered Evergrande this month to deposit the proceeds into a government account.
Evergrande’s debt burden is around 260 billion euros. last week The company defaulted on interest payments on foreign bonds, but then not publicly explained. Bankruptcy is imminent, because the installment payments will expire next week. Globally, the risk of a meltdown is causing investor anxiety. Tight control over money flows shows that the Chinese government is giving top priority to finishing homes, which are often already sold.
With the help of large sums of borrowed money, the company has grown into the second largest real estate developer in China. But recently, it has become clear that this financial situation is unsustainable, especially with Beijing imposing stricter lending standards for the debt-laden real estate sector.
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