When it comes to real estate, we all know that this is a sour subject for many, given the current financial market around real estate assets and how companies like Evergrande are sending shockwaves around the world due to unsustainable amounts of debt and an increase in interest rates from central banks around the world who are fighting inflation.
Evergrande, the largest real estate company in China, holds more than $325 billion in liabilities. When the company could not pay its debts two years ago, they started the process of working on a repayment plan with debtors.
Recently, Justice Chan from the Chinese High Courts has given Evergrande until December 4th to come up with a concrete repayment plan, which the company has been unable to do since it defaulted on its debts two years ago.
Evergrande’s plans to rework its agreements with creditors were dealt a major blow last month when it confirmed that its founder, Hui Ka Yan, and one of its main subsidiaries were under investigation for suspected criminal activities.
Most of Evergrande’s debt exists within China, owed to Chinese citizens who are waiting for the company to deliver homes it promised to build. More than a million Chinese people are still waiting for their homes to be handed over by Evergrande.
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Author: Amaury Abreu
