China orders Evergrande owner to pay off company debt
On October 27, 2021 at 2:41 p.m.
China orders Evergrande founder to use personal funds to pay off company debt
The Bloomberg news agency reported, citing people who knew of the matter as saying: Chinese authorities have ordered Xu Jiayin, founder of troubled real estate firm Evergrande, to use his personal funds to pay off the company’s debts.
The Bloomberg report said the Chinese authorities came after Evergrande failed to pay interest on bonds that were due on Sept. 23.
A source told Bloomberg that local governments across China are monitoring Evergrande’s bank account funds to ensure the company’s cash is used to complete the pending projects. and was not moved to pay debts to various creditors
However, the AFP news agency reported that Xu Jiayin’s personal assets may not be enough to alleviate the company’s $300 billion debt problem. As Bloomberg’s assets report said, Xu Jiayin had less than $8 billion in assets.
The 63-year-old Xu Jiayin was once the wealthiest person in China with more than $40 billion in assets just a few years before the Evergrande financial crisis began.
Last week, Evergrande paid last-minute interest on U.S. dollar bonds before the 30-day grace period ended on Saturday (Oct 23), having survived one default. It is also reported that Evergrande has moved on with more than 10 pending construction projects.
Evergrande must pay interest on another bond on Oct. 29, after the 30-day grace period expires.
Photo by Hector RETAMAL / AFP