Evergrande can be considered the symbolic company of the alternate events experienced by the Chinese real estate sector, protagonist of a boom in the years of the great economic expansion of the dragon and then a victim of an announced debacle, due to the excessive financial imbalance in the sector, which had been literally “drugged” by cheap money injections – largely wanted by Beijing – to finance its development.
And it also represents the story of a Chinese self-made man, Hui Ka Yan, who climbed the top of finance and then found himself facing a mountain of debts that have crushed his dreams of glory. And so the Chinese real estate development company Evergrande raised the white flag and, after various attempts to renovate the debts, had to give in to the delisting from the Hong Kong stock exchange after more than 15 years from the start of the prices in 2009.
The delisting after the boom
Delisting from the Effective Hong Kong Stock Exchange had practically already been announced today; A due act, following the liquidation decided by a Chinese court.
The debut of the title on the stock exchange took place at the end of 2009 at an equity value of 9 billion dollars, which in the years of the economic boom in China is more than quadrupled, reaching 51 billion dollars, before the start of the decline, resulting from the discovery of a mountain of debts worth about 300 billion dollars.
From success to decline
The decline was taken after the pandemic, when the Chinese authorities stiffened the rules for the debt treatments, bringing out shortcuts, who pushed Evergrande to sell a series of properties at torn prices. At the outbreak of the scandal, the Evergrande Group had about 1,300 projects being developed in 280 cities throughout China and controls a group diversified from electric cars to support one of the main Chinese football teams.
The liquidation imposed by the Court
In January 2024, after weight of a series of debt renovation attempts and the pressing requests of creditors, especially foreign ones, the Hong Kong High Court ordered its liquidation.
The Chinese real estate group went default at the end of 2021, for not being able to pay the interests of some foreign bonds. Hence the attempt to renovate the enormous debt that came to the surface, but without great success. At the beginning of the month, the liquidators announced that they had sold only 255 million dollars of activities on an estimated amount of the debt of $ 45 billion. It is estimated that it will take at least about ten years to close the liquidation, but the liquidators have already admitted that the achievement “will prove to be unreachable”.
A story of success ended badly
And what about the owner of Evergrande? Hui Ka Yan is a man who has made himself: from his rural origins, practically a farmer, Hui Ka Yan has become a successful man in the world of high finance, managing a 300 billion dollar empire, before the final capitulation. In March 2024, the Chinese real estateist was fined for 6.5 million dollars by the Chinese authorities, for having overestimated the revenues of 78 billion dollars, and was also radiated for life by the capital market.
