© Reuters. File photo: The China Evergrande Center building logo was seen in Hong Kong, China on September 23, 2021. REUTERS/Tyrone Siu
HONG KONG (Reuters)-China’s Evergrande Group’s share price fell 12% to an 11-year low on Monday after the company said it could not guarantee sufficient funds to repay its debts, prompting Chinese authorities to subpoena its chairman.
As the 30-day grace period for the payment of $82.5 million in coupons due on November 6 ended on Monday, the stock price fell.
Evergrande was once the best-selling developer in China and currently has debts of more than 300 billion U.S. dollars. The collapse may bring shock waves to the country’s real estate industry and other areas.
In a document submitted late Friday, Evergrande, the world’s most indebted developer, also stated that it has received a payment of approximately US$260 million from creditors.
This prompted the Guangdong Provincial Government, where the company is located, to summon Evergrande Chairman Xu Jiaren, and then stated in a statement that it would send a working group to the developer at the request of Evergrande to supervise risk management, strengthen internal control and maintain normalcy. Operation.
In a series of apparently coordinated statements late at night, the People’s Bank of China, banking and insurance regulators and their securities regulators tried to assure the market that any risks in the broader real estate industry could be controlled.
The People’s Bank of China stated that the short-term risks posed by a single real estate company will not disrupt medium- and long-term market financing, adding that housing sales, land purchases and financing in China “have returned to normal.”
Hengjing’s share price fell more than 12% to HK$1.98, the lowest level since May 2010.
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