Evergrande’s plans to offload property unit fall through as default deadline looms

Embattled Chinese property giant Evergrande’s plans to offload half of its property services unit have fallen through.

The deal, which would have raised $2.6bn to pay off its creditors, collapsed after Evergrande decided the purchaser had not met the terms to make an offer.

Evergrande was once China’s top-selling developers. But, after years of piling on debt to fuel rapid expansion across the country, it is now buckling under the weight of over $300bn in liabilities.

The company claims to have built homes for around 12m people in China. Evergrande’s debt is equal to around two per cent of China’s entire economy.

Concerns over whether Evergrande’s collapse could ripple throughout China’s economy has prompted debt-laden peers to be hit with ratings downgrades. 

The developer has missed several bond repayment deadlines in recent weeks, with little update on whether it will make payments within the formal deadline before its debts are classified as in default.

In a bid to find funds to pay its lenders and suppliers, it has scrambling to offload parts of its sprawling business.

In a filing published today, Evergrande said it would continue to implement measures “to ease the liquidity issues” and would seek to negotiate for the renewal or extension of its borrowings with its creditors.