The Evergrande Crisis Continues: Banks Seize $2 Billion, Profits Delayed

During the call, Seo Chun, the company’s CEO, said Evergrande would “enhance communication” with creditors.

He said Evergrande currently has $22.7 billion in foreign debt, including bonds, project loans and private financing. He added that the company has so far contacted 89 external creditors to exchange views with them.

The real estate developer is one of the largest and most indebted companies in China with more than $300 billion in total liabilities.

Credit rating agency Fitch announced that Evergrande defaulted in December — a downgrade that the ratings agency said reflected the company’s inability to pay interest on dollar-denominated bonds.

In 2020, Beijing began cracking down on excessive borrowing by developers in an effort to rein in their rising clout and curb unruly home prices. But the sector’s problems escalated dramatically last fall when Evergrande began urgently warning markets about liquidity problems.

But the patience of some of the company’s international creditors is wearing thin.

In January, a group of overseas bondholders threatened legal action over an “opaque” debt restructuring process. They said they would “seriously consider enforcement action” after Evergrande failed to engage them significantly about reorganizing its operations.

Evergrande has another interest payment due on Wednesday.

The company said in its stock exchange filing that “the audit work is not yet complete”, and that “dramatic changes” in the operating environment and the Covid-19 pandemic have led to delays in preparing its earnings. It said it would publish it “as soon as practicable” after the audit is completed.

Other major developers are also having trouble meeting the March 31 earnings deadline.