China Evergrande Group (3333.HK, abbreviated as: China Evergrande) has ignited the dream of countless Chinese people to own their own house with huge amounts of borrowed funds in the 20 years that they risked high risks and raced against time.
Evergrande has launched one project after another in various provinces, autonomous regions, and municipalities in China, selling off-plan housing and piecing together enough cash to pay the huge interest before the due date.
This carnival is over. China‘s Evergrande’s aggressive debt-raising strategy over the years is inconsistent with the government’s actions to curb the scale of debt, and this large real estate developer is currently on the verge of collapse. Evergrande’s projects in many cities have been suspended. The company is facing a series of complaints and protests from suppliers, small investors, and home buyers who have invested their savings in Evergrande off-plan housing.
Due to financial constraints, China Evergrande announced this summer that it would start paying bills to contractors and suppliers with unfinished properties instead of cash. A paint supplier based in the southeastern province of Fujian said that China Evergrande recently paid the equivalent of $34 million in bills for three unfinished properties; the paint supplier is trying to sell these properties. A manager of a construction company in Wuhan told The Wall Street Journal (The…