Chinese officials are overseeing the assets of Evergrande Group and its chairman, Hui Ka Yan, and do not expect a forced sale of assets by the world’s most indebted developer so far, two sources told Reuters.
The audit shows how Beijing is taking control of Evergrande’s plight after the real estate giant missed payment deadlines on two international bonds, triggering a restructuring of more than $300 billion (BRL 1.7 trillion at current prices) in group debts.
Determining the value of the assets and whether there are any hidden assets will also allow authorities to decide whether a financial recovery program involving government institutions is needed, the sources said.
Beijing has repeatedly assured investors that the situation is under control, but has yet to indicate how it plans to stabilize the company, which last week was placed in “restricted default” status by ratings agency Fitch after it failed to pay $82 .5 million (R$465.8 million) in debt coupons.
Representatives from state-owned entities who are currently in charge of a newly created risk management committee at Evergrande and the authorities’ previous findings show that the property’s liquidity crisis is more complicated than expected, one of the sources said.
Furthermore, according to a source close to the authorities, there is no rush to launch any asset sale plan. Divestment possibilities range from the property management unit to an electric vehicle production arm.
Evergrande representatives did not comment on the matter. Contacts with Hui and the Guangdong provincial government could not be made.
Hui, 63, founder of Evergrande and who currently owns about 60 percent of the company, has freed up funds by selling luxury assets that include three upscale homes as well as artwork.
Forbes magazine estimated in September that Hui has received $8 billion (£45 billion) in cash dividends since Evergrande debuted on the stock market in 2009, although the current value of his current fortune is not known.
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