For months Chinese property giant Evergrande has been collapsing in slow motion.
Yesterday, the embattled real estate behemoth missed a 30-day grace period deadline to pay debts worth over £82m taking the company another step closer to default. The indebted developer posted a statement to the Hang Seng stock exchange to confirm that state representatives had taken the majority of seats on a new risk management committee.
In a statement Evergrande said it “believes that the experience of the committee members, as well as the resources they would be able to utilise, will be beneficial for the group to overcome the challenges it currently faces.”
The creation of a state controlled risk committee is a tactic that Beijing has used to ease the collapse of other heavily indebted companies. Liu Zhihong was named co-chair of the new committee according to the FT, she is already a senior executive from Guangdong Holdings, a conglomerate controlled by the Guangdong provincial government.
Evergrande’s shares yesterday fell to their lowest level on record as investors cleared out the developer over fears it will collapse. The Evergrande saga has seen the company fall from being China’s largest real estate company to buckling under the weight of around $300bn in debt.
With a new risk committee at the helm of the company shares are up 1.9 per cent today. However, they are down over 87 per cent this year to date.